Comments from ACCA to the Strategic Centre for Organised Crime
30 March 2015
ACCA is a supervisory body under the Money Laundering Regulations 2007 (MLRs).
ACCA’s powers are conferred on it within its bye-laws which are set out in the ACCA Rulebook. These powers are exercised through the application of regulations, including Membership Regulations, Global Practising Regulations and Complaints and Disciplinary Regulations. Members are also required to observe proper standards of professional conduct and these are set out in ACCA’s Code of Ethics and Conduct. This contains a section on anti-money laundering responsibilities.
ACCA welcomes the opportunity to comment on the call for information issued by the Strategic Centre for Organised Crime. ACCA is responding both in its capacity as a supervisory body and as an organisation that submits suspicious activity reports (SARs).
As stated above ACCA is a supervisory body under the MLRs and currently supervises approximately 5,600 firms.
ACCA has 14 members of staff in its Monitoring department and 24 members of staff in its Assessment and Investigations departments. These staff have the necessary training and experience to identify suspicious activities during the course of their activities, and understand their reporting activities. (Monitoring activities include all areas of an accountancy practice and not solely anti-money laundering.). Training needs are assessed regularly, with an appropriate response by way of departmental meetings and Continuing Professional Development.
Additionally there is a member of staff in the Standards department (the Senior Regulation Officer) who is responsible for ACCA’s overall AML supervisory responsibilities. This person acts in a similar role to a Money Laundering Reporting Officer and assesses whether or not to make a SAR where a potential suspicious activity involving an ACCA member has been identified. The Senior Regulation Officer also provides much of the training to the Monitoring, Assessment and Investigations departments.
ACCA does not receive information on the number of SARs submitted by its supervised population. ACCA itself submits a low number of SARs and in 2014 only submitted one.
How can money laundering and the financing of terrorism be better identified?
This is a very wide reaching question. ACCA would be very willing to participate in a much fuller discussion on the subject.
Improving information sharing
ACCA is a member of the Anti-money Laundering Supervisors Forum and one of its sub groups – the Accountants Affinity Group. The group is already in discussions with the Financial Intelligence Unit (FIU) and the National Crime Agency (NCA) on the best ways of sharing information and the Forum itself shares information between supervisors as far as ‘gateways’ allow. However, one of the major supervisors is HM Revenue & Customs, and its provisions for information sharing are currently very limited.
In late 2014 the NCA sought the views of supervisors concerning direct access to the SARs system. The Accounts Affinity Group’s view (including that of ACCA) was that supervisors should not have direct access to SARs. The group has identified two key objectives for information sharing between supervisors and law enforcement: firstly, to identify risks and trends which must properly be understood and managed by professionals within the regulated sector and, secondly, to identify high risk professional enablers within the regulated sector, to ensure their services are not used to facilitate money laundering or terrorist financing. Direct access to the SARs database would not assist in achieving these two key objectives, but would create risks and vulnerabilities within the regime. As set out in the Group’s letter to the head of the UK FIU in November 2014, the risks identified include:
An indication of the types of information that the accountancy sector supervisors would like to receive are set out in the attached appendix to this response. We should point out that the accountancy sector would have different needs to supervisory bodies in other sectors falling within the MLRs.
One of the key initiatives should be to provide improved feedback. Anecdotal evidence from the accountancy sector is that practising accountants receive no information on the usefulness of the information provided in a SAR, and professional bodies receive no information on any investigation or actions that result.
Improving the efficiency of reporting
ACCA makes all its SARs using the on-line system. The same system has now been in use for many years, and ACCA believes that an update to encompass more advanced technology would be beneficial, particularly to speed up inputting the information. ACCA appreciates that the majority of SARs are made by banks and other financial institutions, and that the reporting form was designed with these in mind. Therefore, its use is not always intuitive for other types of business completing the form.
Additional fields that would be helpful could include the name of the reporting entity’s supervisor (which would aid reporting SARs data and statistics back to the supervisory bodies) and a specific field for the SAR Glossary Code, rather than including this in the text box for the ‘reasons for suspicion’.
ACCA has never had the need to submit consent SARs, but it would seem logical for entities to be able to submit these on multiple or linked cases as this would be expected to be more efficient.
Improving the consent regime
ACCA has no experience of the consent regime and has not received any feedback from its members. AACA is, therefore, unable to comment on this area. However, members of ACCA have been made aware of the call for information, and have been invited to provide information regarding their experiences directly to the Strategic Centre for Organised Crime.
Fundamentally, members’ requests for consent must be dealt with promptly, in order to provide clarity and avoid deemed consent being given inadvertently. In addition, SARs received by the NCA must be used appropriately and in a timely manner.
International best practice
ACCA has experience of AML regimes in Ireland, the Isle of Man and Cyprus but is unaware of examples in these jurisdictions that could be hailed as best practice.
International co-operation is clearly very important in the combating of financial crime but ACCA is not in a position to comment on how co-operation and exchange of information between the relevant agencies could be improved.
This schedule has been taken from the letter of the Accountants Affinity Group to the head of the UK FIU in November 2014.
‘AAG indicative information needs
1. Analysis of SARs provided by members from each Supervisory Authority (SA)
when combined with member data from each SA - we could create a combined data set and provide statistical reports identifying, among other things: types of SAR; geographical spread; spread across different sub-groups within the membership (e.g. by reference to their services or size); or different types of client (domestic/overseas, large/SME/micro); etc.
2. Information on quality of SARs (who, what, how, why)
when combined with input from the NCA's SARs team on where they see common problems, lack of clarity, missing data, etc.;
3. Information on SARs about our members/firms (potential professional enablers)
as noted this data would need to be managed carefully, in close liaison with LEAs, but being aware of potential issues should encourage a fruitful dialogue and useful liaison with SAs.
4. Information on consent SARs
most of the elements referred to above should equally apply to this data set too
5. Information on SARs not yet provided
its possible, if we could get others to provide SARs - e.g. LEAs on professionals - that we could all gain a much better understanding of where and how potential professional enablers are operating (whether in practice or in business). There is currently a dearth of information about an area of AML which appears to be a major concern within the NCA.
With this information, supervisors could: