David winch, one of the leading voices in the interpretation of the ever expanding Money Laundering Regulations, was recently quoted on the Accounting Web regarding action taken against defaulting firms who may not have appreciated the extent of the 2017 changes. He said:
“Accountants have been focused, very sensibly, on MTD and other developments, and may have regarded MLR 2017 as simply MLR 2007 with a slight change of name. There’s some truth in that. But one innovation introduced by MLR 2017 was the hierarchy of risk assessments,” Winch told AccountingWEB.
“The idea is that the government (HM Treasury and the Home Office) produces a UK risk assessment for MLR, then the supervisory bodies use that to produce a risk assessment focused on their sector, then each firm produces a risk assessment focused on the type of work, type of clients, business sectors, geography, their methods of dealing with the clients that they deal with and then in relation to each client there is an MLR risk assessment.
“So, for instance, if the firm has a niche of dealing with, say, pubs and retailers, or deals with clients online rather than face-to-face, that will be reflected in the firm-wide risk assessment.
“Some firms have missed out that firm-wide risk assessment – which is now required by Reg 18 MLR 2017. And that was one of the failures highlighted by HMRC.”
Winch also flagged that the £519 penalty recently charged to a defaulting practice, may seem modest, but lurking beneath this would likely be further financial and reputation damage.
“The hassle of dealing with this sort of investigation and disciplinary process from HMRC or the institutes must be considerable,” he added. “This is grief which none of us needs!”
Risk assessment support
David’s support regarding the preparation of practice wide MLR risk assessments is available via his company MLRO Support Ltd. Email firstname.lastname@example.org if you would like to discuss this in more detail.
Another area that may not be receiving the attention required by legislation is staff and sub-contractor training.
David has collaborated with Giles Mooney of PTP Training to create an affordable, online training process for all staff, sub-contractors and partners. This is a simple and accessible solution to this area of MLR regulation. Details of features and costs are available here.