The requirements of the Criminal Justice (Money Laundering & Terrorist) Act 2010 have been in place for around about a year at this stage.  This means that firms should, by now, have established and fully implemented appropriate procedures and policies in respect of the business they undertake, their clients and their business, have carried out a risk assessment of their own procedures, adopted reporting procedures and have implemented an appropriate training regime.

Whilst firms were already used to verifying the identity of new clients by obtaining proof of identity with the requirements that were in place prior to 2010, one of the new requirements introduced is to verify the identity of ALL clients both new and existing.  As a year has passed since implementation firms really should have completed the majority of identification of existing clients at this stage.

Several other areas are now covered by the requirements of this Act also, for example, the requirement to have additional verification procedures for non resident clients or for those that the firm does not meet in person. 

In relation to the identification procedures which are to be used, firms have the ability under the 2010 legislation to be able to rely on the client identification processes of a third party where that third party is also a designated person as outlined in the legislation, eg a member of another recognised accountancy body, and where that firm has granted permission for its identification processes to be used.  A firm that is utilising a third parties identification processes  must be confident that the third party is utilising appropriate procedures and is confident that if it asks for a copy of identification documents that these will be supplied in a timely manner.  A firm should be aware that they will be responsible for the failure to properly identify a client if they rely on a third party for identification and that identification process is subsequently found to be flawed or inappropriate.

Another of the new requirements is to introduce the concept of risk assessment across not only the client base but also the risks that are prevalent for the firm.  In respect of a firm’s clients, it should risk assess the clients, the type of business sector they are in, the type of business they do and the type of services that the firm may provide for them.

Whilst the legislation does not instruct the appointment of a Money Laundering Reporting Officer (MLRO) it is probably easier for a firm to do so to ensure that one person has the ultimate responsibility to ensure that appropriate procedures are adopted and implemented and that training is undertaken.

The appointed MLRO should be a senior member of staff such as a partner, or as a minimum a senior manager as this individual is responsible for:

• Risk assessing the firm’s own activities;
  
• Risk assessing the client base ;
  
• Arranging and/or providing training for all members of staff within the firm;
  
• Carrying out, or arranging to have carried out, an annual compliance review;
  
• Implementing procedures internally;
  
• Assessing internal reports and making external reports as required;
  
• Providing support to staff to ensure ‘tipping off’ does not occur; and
  
• Liaising with authorities should they require further information.

In addition this person needs to have an in depth knowledge of the clients, their businesses, the business sector and more importantly the activities and transactions that would be unusual or even suspicious and which may point to money laundering or terrorist financing.

It is also important to realise that your regulator has a strengthened responsibility to ensure that the firms they regulate are complying with the legislation and as such they will be including an assessment of your policies and procedures and the documentation you keep on file as part of an onsite compliance monitoring visit.

To assist firms with the implementation of appropriate processes and procedures OmniPro Practice Support has developed an Anti Money Laundering Compliance Manual, will provide training in the implementation of this manual within a firm and offers an Annual Compliance Review.  Should you wish to avail of any of these services then contact Michelle Kane  today for a quote.

Michelle Kane

OmniPro,
Block D, Iveagh Court,
Harcourt Road,
Dublin 2.

mkane@omnipro.ie
www.omnipro.ie
www.MichelleonLinkedIn.com