Accountants and auditors play an important role in keeping citizens and society safe from money laundering and terrorist financing, but their day-to-day work will be affected by 5AMLD.
The new Directive responds to public calls to counter terrorist financing and to address the lack of beneficial ownership transparency. The scope of the Directive has expanded and includes new rules and frameworks for beneficial ownership and enhanced customer due diligence.
AIA firms and supervised individuals will be required to be fully compliant with the new requirements from 10 January 2020, however account will be taken of the short lead-in time businesses have been given to implement all the new requirements in assessing any responses to non-compliance. Each case will be assessed on its own merits.
Members in Practice should take steps now to assess their compliance with the new regulations
AIA will release additional guidance in January 2020 alongside updates to the Anti-Money Laundering Guidance for the Accountancy Sector (AMLGAS) document.
Many of the changes under 5MLD don’t affect accountancy firms – as the changes bring letting agents, art dealers and crypto currencies into scope, although there are key areas that firms and individuals must address in their policies and procedures:
- firms providing both direct and indirect tax advice are now brought into scope (e.g., repayment agents who act in the course of business as tax advisers, often referred to as High Volume Repayment Agents)
- when you take on a client, you must check that the client has filed details of the Persons with Significant Control with the registrar (i.e., Companies House) and report any discrepancies you identify; and
- there is confirmation that electronic ID verification can be considered as a reliable source of evidence, where the electronic process is free from fraud and provides sufficient assurance of the identity of the individual.
The UK government will be publishing a list of public functions that would make someone a Politically Exposed Person.