54% of accountants unaware of 5MLD could face severe penalties

Joanna Bassey-Edim Marketing Executive, Capium

An alarming 54% of accountants are unaware of the changes to the anti-money laundering (AML) regulation. Worrying, as the fifth money laundering directive (5MLD) came into force 10 January, over a year ago. Are you a part of the 54%? Are you ready to receive a sanction, a fine, or even a prison sentence from HMRC because you are ill-informed? Ignorance isn’t bliss, neither is it a plea in a court hearing. HMRC are increasing the pressure. In one instance issuing a record £23.8m fine to crack down on accountants who disregard money laundering regulations. You don’t want to get caught on the wrong side of the law, whether it’s intentional or through negligence. A simple £3 business AML check with Capium could save you thousands of pounds in penalties, future proof your business and reputation. Don’t leave it to chance and don’t assume you are covered. Especially at a time where economic markets become turbulent and where financial fraud becomes more prevalent.

Home working means today the risks are greater. The fraud rate increased by 33% during covid-19 lockdown. Increased pressure on people, companies, and the economy during crises are often when fraud is most virulent. These realities motivate fraudsters to act. Traditional avenues for criminal activity have been disrupted by the national lockdown, consequently the threat landscape is broader because of major cybercrime and money laundering opportunities. Accountancy practices are not immune from the impact of these realities. Accountants are responsible for ensuring their expertise and services are not being used to legitimise a fraudulent transaction. Accountants must tighten their AML compliance processes, especially in the covid-19 era where AML has become increasingly scrutinised.

Why is this important for you?

Accountants are gatekeepers, facilitating important transactions that support the UK’s economy. With heightened fraud, the AML directive has been enforced by the European Union to tackle this issue. The most updated directive to date is 5MLD, adopted by the EU. Although the UK has left the EU accountants must still comply. Failure to comply is fatal for the UK economy and also means you could face extreme penalties. HMRC recently released the names of businesses who faced penalties for not being AML compliant.

What does this mean for you?

The onboarding process is typically where financial fraud starts. That’s why it’s critical to stop fraud at the starting point of your relationship with a prospective client. It’s a crucial touchpoint for protecting your business against financial crime. It’s also the key avenue to ensure you are fulfilling AML obligations. Implementing such a small change like AML software to your onboarding process can make a huge difference. It can increase your efficiency, ensure a seamless customer experience, automate your AML obligations, and most importantly future proof your business. Especially now as face-to-face interactions are out of the picture, accountants should brace themselves for a future that’s virtual whether in the office or at home post-covid-19. Today there are hundreds of digital AML solutions so there is no excuse for why you aren’t up-to-date with your AML obligations. We partnered with Gordon Gilchrist, 2020 Innovation group and Richard Devine, Veriphy in a free webinar to show you how AML software can transform your onboarding process and keep you up to date with your AML checks during the covid era.

What do you need to know?

AML regulations apply to accountants and financial professionals alike who provide the following services:

  • Professional bookkeeping services
  • Accountancy services such as preparation and signing
  • Giving tax advice
  • Helping with completing and submitting tax returns or duty claims
  • Advice on the amount of tax or duty that is due
  • Carrying out audit work

What should be collected as part of customer due diligence?

Due diligence should form part of a firm’s risk assessment. It’s imperative that you:

  • Identify your client
  • Verify your client’s identity
  • Gather information on the purpose and intended nature of your business relationship
  • Apply enhanced due diligence where appropriate

To keep up to date with AML obligations on top of an already jam-pack schedule is no easy feat, consequently this opens a pandora’s box of challenges. These challenges came to light in our survey, as the 5MLD has seemingly crept up on some accountants.

Another challenge that isn’t talked about enough is how time-consuming the onboarding process can be when done manually. This is especially taxing when trying to create a seamless customer experience for a new client, particularly if you don’t have the tools to ensure you are carrying out a thorough enough check.

So, you want to switch from manual AML checklist and risk-assessment to an integrated AML software or just interested to find new AML software on the market, with hundreds of AML software’s to choose from how do you know which one has the latest AML compliance updates? How can you find the right AML software for you without breaking the bank?

How can Capium Help you right now?

We created our AML feature to ensure you are safe and compliant in real time because what’s important to you is important to us. We’ll help you keep moving with the changes and difficult times by giving you the tools and support to comply now and in the future.

Our AML feature takes the pressure off by checking prospective clients in an instant and ensures your in line with the latest AML directives.

Plus, our easy to use, 100% cloud platform is a remote working solution giving you and your team the freedom to work from wherever you are.

Protect your practice with our AML solution which saves records for 5 years in line with regulations and act as a great safety net to your practice.

We’ve got you covered, you’ll experience a smooth and safe client onboarding process with AML live check, in partnership with Veriphy. Unlike our competitors, it’s affordable too, at £3 per check you don’t have to break the bank, you’ll pay less for more.

You’ll receive a complete audit trail, over 10 different checks and there’s no setup or license fee. Our service is in line with the 2 + 2 criteria required to be compliant with the latest 5MLD.

Watch our AML feature in action now to find out how it works.

We know it’s been a turbulent few months so we’re cutting the cost, offering you 50% off your practice management module.

Like what you hear? Book a demo today to find out about our services or talk to our product specialist to find out more about how Capium can help you ensure AML compliance in 2021.

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