Since the introduction of the Money Laundering Regulations in 2007, bookkeepers in practice have been required to put in place certain controls to help them identify, prevent, and report money laundering offences.
Bookkeepers are required by law to be monitored by an HM Treasury appointed supervisory authority such as ICB and to put in place anti-money laundering controls and, specifically, to implement policies and procedures for:
- Customer due diligence and ongoing monitoring
- Reporting procedures
- Internal control
- Risk assessment and management
- Staff training
Know Your Clients
As a professional bookkeeper you should know as much as possible about your clients and their businesses. This will not only help you provide the level of service that they need but it will also ensure that you are fully aware of everything that goes on in the financial transactions of the business.
If you are carrying out only part of the overall financial function for a client, you should make sure that you understand how your figures fit into the bigger picture and you should be certain in your own mind that your figures are used properly.
You should keep notes or back-ups of any figures that you produce for the client to ensure that these are not altered in any way once they have left you. You should also remember that you must keep sufficient records to show how you reached the figures you produce, even after you have ceased working for the client. These records should be kept for a minimum of six years after the end of your contract or the last transaction. These need not be copious notes but if the former client is subject to a tax or VAT inspection after you have finished working for him, they may need you to explain how the figures were reached.
You should also ensure that your professional indemnity insurance has run-off cover. This will cover you if you retire or cease to trade as a Practice. You should discuss this with your insurers.
It is worth remembering that the majority of clients are legal, decent, honest and truthful and that the purpose of introducing the MLR is not to catch these people out or to make your life a difficulty. The MLR are there to protect us all and, if handled correctly, we should be able to assist the Treasury, HMRC and SOCA to do their jobs better and to catch those few individuals and firms who are laundering money or financing terrorism.
Some clients, and indeed some bookkeepers, might operate outside the law and it is our collective duty to be vigilant, careful and professional in all we do. The appointment of ICB by HM Treasury as a Supervisory Body is a major affirmation of our standing in the profession and the fundamental role that bookkeepers play in proper financial management within Britain’s small and medium-sized business sector. We now have to step up to the plate and accept the responsibility that has been placed on our shoulders.
"The AML duty represents an exciting challenge for you and your fellow ICB members; exciting because bookkeepers are now viewed as professionals and the skilled work they carry out is recognised as a crucial element of maintaining accurate financial records; a challenge because bookkeepers are now required to know more about the people and businesses that they work for and be in a position to detect errors or discrepancies that may in fact be evidence of money laundering.
"As part of its commitment to ensuring that members have fully understood what they need to do, ICB has produced the following anti-money laundering (AML) guidance. ICB head of compliance, Ray Cross who previously worked for the Serious Organised Crime Agency (SOCA), has used his vast experience to put together this comprehensive guidance to assist you in complying with the regulations and carrying out your work at the forefront of our profession.
"In addition to the guidance, ICB provides a free telephone support line from which members can obtain further guidance or reassurance.
"As part of its duty to HM Treasury as a supervisory authority, ICB routinely contacts members via telephone and email to ensure members are keeping proper records. ICB is also required to visit a number of members to inspect their records. There is no need to be concerned if you are contacted; the primary purpose of the contact is to support and educate.
"Please remember that AML support is available on 0845 060 2345 if there is anything you do not understand, or on which you need clarification. Alternatively please use the dedicated money laundering regulations email address at firstname.lastname@example.org.
"Good luck and good business."
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