Combating money laundering and terrorist financing

Combatting money laundering and terrorist financing has been on the global standards agenda for at least a decade before the tragic events of 9/11, which significantly increased the profile of criminal financing. 

At that time, the height of technological sophistication was the introduction of wireless internet, a feature we all take for granted now. Over the course of the past five years, we have seen a magnitude of technological developments. From the smart phone, with the support of Siri and Cortana, through to the virtual currency of Bitcoin and beyond. All of these have increased the challenges that accountants now face argues Head of Conduct and Compliance, Tania Hayes.

What has this got to do with accountants?

A key vulnerability that offenders can exploit in order to pursue their own criminal aims successfully is ignorance, or a lack of understanding. In the context of the work of accountants, this can mean using legitimate services to pursue illegitimate means, resulting in you cleaning up dirty money. Crucially, you may be none the wiser to the fact that your services are being used in this way.

So where should you start in protecting your business and career from the debilitating effects of being complicit in the success of the criminal underworld?

The key risk you have relates to who you are dealing with. Do you really know your clients and their businesses? Accountants are now required to be equally as alert to the prospect of terrorist financing, which is not so easy to spot. This is where you have to defy all the life lessons that have been drilled into you about not being nosey, and start asking those probing questions.

The key things that criminals hate the most is being questioned about the source of their funds, or why they want to undertake certain actions. Do not think of yourself as being nosey, but think of its true and intended purpose instead. You are simply demonstrating the professional scepticism which sets you aside from unqualified counterparts.

It is important that you keep abreast of what the new technological developments are and consider how these could be used for Machiavellian purposes. As recently as late last year, it was suggested by Brooke Satti, a leading specialist in financial crimes intelligence, that “cryptocurrencies” are the money making mechanism of choice for ISIS. This terrorist organisation have increasingly come up against the robust barriers put in place by the global commitment to anti money laundering and counter terrorist financing.

Here is something to ask yourself: would you know how to trace transactions back through to Bitcoin? And if you did, how would you satisfy yourself of the legitimacy of the funds? Whilst I don’t expect each and every one of you to become technological experts, there is a argument for having a strong knowledge base and this is considered crucial for your Continuous Professional Development (CPD).

Professional enablers are equal in the eyes of the law

Some people might choose to be criminals. The law however, is increasingly holding those referred to as “professional enablers” (including accountants), who through ignorance or naivety engage in criminality and terrorism, equally as responsible as the lawbreakers. And for those who are at risk of falling into the latter category, I would strongly advise you to take your obligations under anti money laundering legislation, and AAT’s Code of Professional Ethics seriously. To quote Max Ehrmann “exercise caution in your business affairs, for the world is full of trickery”.

Tania Hayes is AAT's Head of Professional Standards & Strategy.