By Steve O’Neill, Managing Director of BTC – trusted partner of Leonard Curtis, providers of the Lifecycle network
Ahead of its Anti-Money Laundering (AML) Update Webinar on Tuesday 8th December, Lifecycle caught up with tax expert and author Steve O’Neill who will be hosting the free session.
2020 has been a year of unprecedented uncertainty in so many ways and ensuring AML compliance in such challenging times has been one of them. So, in this hour-long webcast, Steve will cover this year’s updates to the 5th European Money Laundering Directive (5AMLD), the impact of the pandemic and how to ensure client checks remain rigorous, despite not being able to meet face-to-face.
Here Steve shares his thoughts, insight and experience on how to operate during COVID and beyond and gives a taster as to what he’ll be covering in his online seminar.
ALWAYS REFER TO 5AMLD
The amended 5AMLD was introduced in January this year, and it’s important that we always refer to it.
COVID or no COVID, failure to report any information discrepancies to Companies House has severe consequences – from warning letters and damaged reputations, to fines of up to a maximum of €5m or 10% of annual turnover, sanctioning and, in the most serious cases, criminal prosecution. No one can afford to overlook 5AMLD.
REMEMBER THAT ELECTRONIC IDENTITY VERIFICATION WAS ALREADY A RELIABLE SOURCE OF EVIDENCE
AML compliance was becoming increasingly digital before the pandemic, so much of the legislation set out within 5AMLD has stood us in good stead to operate during it. In fact, it’s good to see that it’s supercharged the process.
Electronic identity verification was already a reliable source of evidence and it can be used as the sole form of client verification, which has proved very useful and convenient in recent months. The identity of all directors, ‘people with significant control’ (PSC) and those filing information on behalf of a company can be verified electronically.
Fortunately, there are more ways than ever to identify the client and verify their identity when they’re not present. For example, almost three quarters of UK banks now use fingerprint, facial recognition and other biometric authentication software as customers move to digital platforms and regulation increases.
FOLLOW THE LEAD OF COMPANIES HOUSE AND BECOME 100% DIGITAL
Companies House is reforming its register and is on a digital journey of its own, planning to become a ‘fully digital’ organisation by 2025. It’s developing a fast, efficient, 24/7 digital identification and verification process on all 4 million companies registered with Companies House.
It’s proposed that identity verification will become compulsory by 2025. It will be the responsibility of all company directors, PSCs and those who file on behalf of a UK-registered company to verify their identity on the register and it will be necessary to provide evidence of the verification undertaken. From 2025, those who fail to do so will be struck off.
BREXIT AND IDENTIFYING BENEFICIAL OWNERS
As we prepare to leave the EU on 31st December, we should all be aware of the revised due diligence we’ll be obliged to undertake for any European-based clients once we’ve exited. From 1st January 2021, we’ll be regarded by Europe as a ‘third country’, meaning Customer Due Diligence (CDD) checks and other verification processes will be treated differently.
There will be a greater need for additional transparency when it comes to identifying beneficial owners, which, under the new Directive, extends reporting requirements to any legal arrangement like a trust, and tax neutral trusts. And member states will be required to identify beneficial owners and to maintain public registers of these.
Simplified verification processes will also become more robust and deals will take much longer to complete due to the additional checks required as a result of the UK’s new ‘third country’ status.
Under 5AMLD, accountants are also required to keep a more general eye on all beneficial owners and revisit their risk assessment every 12 months. This is to ensure that the information held on file is the same as what is logged at Companies House. Any discrepancies must be discussed with the client and, if not resolved, the working relationship must be terminated. It’s our social and professional responsibility.
KNOW HOW TO RESPOND TO A SUBJECT ACCESS REQUEST
In their fight against money laundering, the police are increasingly contacting accountants with Subject Access Requests (SAR) about their clients.
Following EU-wide changes to data protection rules, introduced in the UK as the Data Protection Act 2018 (GDPR), you can make a Subject Access Request for free.
When it comes to dealing with SARs, there are some very specific guidelines set out by the Information Commissioner’s Office (ICO) here.
Lifecycle’s FREE Anti-Money Laundering Update Webinar takes place on Tuesday 8th December, from 12pm – 1pm. Register to attend the webinar here.
About the Lifecycle network
Lifecycle is a unique network for accountants – provided by the Leonard Curtis Business Solutions Group.
Lifecycle is free to join and also offers members many additional benefits. These include access to a regular programme of free training and education and discounts on products and services relevant to their business and clients’ needs.
Services offered by Lifecycle include: Company secretarial and formation; equity finance for SMEs; debt advisory for SMEs; personal debt advice; corporate restructuring, insolvency and cessation; debt finance for SMEs; cashflow maximisation; property solutions and legal services.
For more information on Lifecycle click here and to become a member of Lifecycle click here or call for free on 03300 242 333.
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