AAT licensed members who are supervised by AAT for Anti Money Laundering must now comply with new government regulations requiring extra DBS checks.
What are the new rules?
New rules came into force on Tuesday 26 June which require AAT licensed members to apply for a Basic DBS check and receive a Basic Disclosure Certificate in order to continue practising. Supervised licensed members need to have their checks completed as soon as possible, and licensed member applicants will not be approved until AAT receives their certificate. The check, which relates to Schedule 3 of the 2017 Money Laundering Regulations (MLR 2017), will ensure that you don’t have an unspent criminal conviction which could compromise your ability to practise under the new rules.
Currently, anyone with a relevant criminal conviction is likely to be barred from professional membership of an accountancy body through their fit and proper tests and will not be allowed to continue practising. This helps to regulate the accountancy services sector.
However, these checks do not stop people with criminal convictions from operating outside of the professional sector. It means that people with serious criminal convictions might still be able to work at a senior level within supervised firms. Therefore, the new MLR 2017 introduced an additional requirement for any beneficial owner, officer or manager (BOOM) to have an extra check and approval process from a supervisory body.
Only those without a relevant criminal conviction will be allowed to continue to act as a BOOM.
What information will I need to provide?
A DBS check will require you to give details of your current and previous address and provide original documents to confirm your identity.
In December 2012 the Criminal Records Bureau (CRB) and the Independent Safeguarding Authority (ISA) merged to become the Disclosure and Barring Service (DBS). The CRB Check is now referred to as the DBS check.
How will the process work?
AAT licensed members who were approved prior to May 4 2018 are asked to apply for their check using a specialist third party – Due Diligence Checking Ltd (DDC).. Applicants are able to contact DDC with queries, who will assist them throughout their application. Members will not need to send anything to AAT, as DDC will manage all applications and relay the relevant information to AAT.
AAT licensed members who were approved from 5 May 2018, and current applicants, are asked to apply directly with their appropriate body (Disclosure and Barring Service for England and Wales, Disclosure Scotland or AccessNI in Northern Ireland) and send a copy of the document directly to AAT.
What is a relevant conviction?
Adam Williamson, Head of Professional Standards at AAT, explained that SP30s and other motoring offences are not considered to be an issue.
“Our main concern is around serious convictions such as fraud,” he says.
County Court Judgements (CCJs) and Debt Relief Orders (DROs) do not come up on DBS checks.
“We have our own policies around DROs and CCJs,” he says. “When people apply or file their annual return they are required to tell us about that as a matter of course but it is unlikely to cause serious problems.
“We would be more concerned about insolvencies and serious criminal convictions where [there] might be danger of harm or abuse of position. That is what we are most strict on.”
If the DBS check uncovered a criminal conviction for fraud then it is likely that the BOOM would have their licence removed and they would no longer be able to practise as a supervisor.”
Why you should take this seriously
The MLR 2017 came into force on 26 June 2017. It is important for firms to take the new regulations seriously. New research conducted by ID verification provider, Credas, reveals that a significant number of businesses may be in danger of breaching Anti Money Laundering (AML) legislation.
Rhys David, CEO of Credas, said: “Anti Money Laundering checks are becoming much more stringent, and now is really the time to streamline processes and make sure everything is in order before investigations take place. Weak processes and undertrained staff can leave the door open for criminals.”
Evan Wright, partner in the Corporate and Professional Regulation team at JMW, said that from 26 June it would be a criminal offence if someone were to act as a BOOM without approval.
“It means that ownership and management of firms becomes more transparent,” he said. “It is an extra burden that is now placed on the firm.”
Along with a package of other AML regulations, it should in future be easier to expose questionable transactions within firms, he said.
“Whether or not the regulations will have an effect will depend on the degree to which they are enforced, and whether the rules governing failure to obtain authorisation actually have teeth,” he said.
Michael Harris, Director of Financial Crime and Compliance at LexisNexis Risk Solutions, said the new Money Laundering rules had come about because the UK government had been looking at financial crime. The UK was a major financial centre and as a member of the G7 and part of the EU it was obliged to follow the guidance for EU countries.
He said that in practice the MLR 2017 would, on a wider scale, require all firms that were involved in financial transactions to do proper due diligence on clients.
“It is an environment which is becoming more demanding in terms of checks,” he said. “Even after Brexit we will be seen at the forefront of this. The UK is still viewed as a leader in this area.”
AAT licensed members can find further support and guidance on Anti Money Laundering online.
AAT licensed member applicants can also find more information on the AAT website
Marianne Curphey is an award-winning financial writer and columnist, and author of the book How Money Works. She worked as City Editor at The Guardian, deputy editor of Guardian online, and has worked for The Times, Telegraph and BBC.