ICAEW publishes AML Supervision Report 2023/2024

The ICAEW has published its Anti-Money Laundering Supervision Report 2023/2024: Protecting Against Professional Enabling which provides an account of its AML supervisory activities over the 11,000 firms it supervises. ICAEW is the largest of the accountancy professional body supervisors for AML in the UK.

Headlines

During the period covered by the report (Q2 2023 to Q1 2024), ICAEW carried out 1,088 AML monitoring review visits of which 35% were categorised as high or high-medium risk of being used to enable money laundering.

Of the firms reviewed, 19.3% (compared with 15.6% in the prior year) were found to be non-compliant with the AML regime.

In the year, one ICAEW member was excluded due to significant failings, 39 severe reprimands were issued and fines totalling £92,025 were issued. This represents a significant drop in the level of fines from the previous year of £218,275.

Key findings

The common issues identified at supervised firms will come as no surprise for most – these are the same issues that have cropped up for several years and are consistent with those findings of reviews carried out by Mercia. They include:

• Client identification procedures
  Firms performed ineffective client identification procedures, such as failing to identify all beneficial owners, failed to understand the basic nature of the client’s business or the jurisdictions in which it operates and a general lack of understanding of the client.
  
  
• Risk assessment
  Many firms had ineffective risk assessment documentation. In some cases, this was due to not documenting risks which they had identified, in others it was a total failure to risk assess at all.
  
  
• Verification
  A significant number of firms failed to perform verification effectively by not gathering sufficient evidence to manage or mitigate the risks identified. Obtaining more ID for a client won’t help on its own if the risk is around other factors such as operating in a high-risk third country.
  
  
• Ongoing CDD
  Some firms failed to undertake ongoing CDD on any of their clients or did not record their considerations of whether any new information had come to light that might change the risk assessment or require additional verification procedures.
  
  
• Firm-wide risk assessment
  Several firms failed to complete a firm wide risk assessment or to keep it up to date.
  
  
• Compliance review
  A number of firms had not performed a regular review of the adequacy and effectiveness of their policies, controls, or procedures.
  
  
• AML training
  Some firms had not provided sufficient AML training to their staff.
  
  
• PSC reporting
  A number of firms also failed to report discrepancies on the PSC register of relevant clients.

How can Mercia help?

Mercia’s MLRO Support Service includes a range of products and services to enable MLROs to comply with the money laundering regime including access to our Money Laundering Compliance Manual, access to firm-wide AML training, access to our technical query helpline for AML queries and a monthly anti-money laundering newsletter.

We’re also on hand to conduct AML compliance reviews and offer advice and support through our technical query service.