Payroll insight
party to money laundering, which carries a potential jail term. So, yes, I do need to carry out a client wide risk assessment to protect myself. As regards the generally recognised risks of running a payroll, most offences constitute a crime. The proceeds of such crime will be evident and, matched with intention rather than error, are likely to be money laundering. Suspicion or knowledge of money laundering is reportable to the National Crime Agency (NCA). The question that will need some further thought is what scope is there for a practice operating as a payroll bureau without accountancy and bookkeeping services to rely upon work undertaken by the client’s accountants or bookkeepers? The first thing to note is that whatever you may choose to rely on, the responsibility for compliance will still rest with the payroll bureau and not the third party sharing the information. Be sure that relying on a third- party doesn’t create, rather than prevent, a risk. This extract of the Guidance, at para 6.1.15, should be etched in your mind: “An innocent error or mistake would not
normally give rise to criminal proceeds (unless a strict liability offence). If a client is known or believed to have acted in error, they should have the situation explained to them. They must then promptly bring their conduct within the law to avoid committing a money laundering offence. Where there is uncertainty because certain legal issues lie outside the competence of the practitioner, the client should be referred to an appropriate specialist or legal professional.” ...a mindset, an approach to how you operate your business... I would certainly recommend reading the Guidance; you may then see that AML is not that bad.
business and a desire not to keep having to look over your shoulder. AML will protect your firm. The real cost of AML is time and resource. If you want to stay in practice and out of jail, it’s essential to get it right. The essential questions are: Do you know right from wrong? Can you identify a risk? There’s no presumption of amazing legal knowledge or that you’re a police detective, just that you have a willingness not to turn a blind eye to the obvious. When you’re considering any AML situation, there’s an imaginary person reviewing your actions and casting an independent eye over your decision making. If you’re questioning your own decision making, ask yourself what would the independent person say? There’s also an assumption that you have an awareness of the state of the world. Would you choose to relocate yourself and your family to any particular country? That’s a pretty good indication of a country’s state of law and general stability and hence it’s money laundering risk. Ask yourself what factors would influence such a decision? n
Compliance and risk management
Achieving AML success is well within your reach. Simply put, it’s a mindset, an approach to how you operate your
WE LOVE AMLCC The following steps to AML success are a part of our training routine.
● ● W rite it down – AML is not the only part of our work where we find ourselves keeping notes of calls, meetings and decisions. For AML, if it’s not written down it didn’t happen. Remember you’ll need a firm policy, firm risk assessment and a risk assessment for all clients, which must be documented. ● ● E ducate and train – Training every member of your team is essential; why take the risk that something is missed? You’ll be responsible for what they miss. Training should be technical, practical and cover your processes, policies and controls. ● ● L ook out for a visit – You must have an AML supervisor who will monitor your AML compliance. Don’t forget that the police, trading standards and HM Revenue & Customs are amongst the bodies that could request evidence of your AML compliance. ● ● O perational and organisational – AML is part of virtually everything that happens within a professional practice. The ‘stick-of- rock’ approach (the words run through it) is the simplest way to consider it, forming part of your firm’s ethos and how it interacts with clients. Many aspects of your existing processes and procedures will require only slight amendments to be fully AML compliant. ● ● V erify and identify – You need to know and verify who your clients are and where they live. (How can you make a report to the NCA without knowing these details?) ● ● E valuate risk – Essentially, this is the actual risk to you of being exposed to money laundering. Demonstrating how you reached that conclusion is where the work comes in. Yes, there will be clients that will require more research and more work to understand and evidence but that’s quite normal. ● ● A llocate resources – There’s no denying that there is a time and effort requirement to achieve compliance. The biggest step will be to get everything in place in the first instance; but once it’s done it will fall as part of your routine procedures and will place less of a burden. ● ● M onitor and update – As your clients change, your firm changes and recognised sector risks change, so must your AML approach. Your control checks will help you to refine your procedures. ● ● L aw enforcement need to know – Reporting to the NCA is the end result of effective AML procedures. If you are asking yourself, is there a crime and are there proceeds, then it’s time to consider if a report should be made. Remember it includes suspicion and grounds for suspicion; what would someone looking over your shoulder think about what you’re faced with? ● ● C ounter terrorist financing (CTF) – AML and CTF compliance generally overlap, so don’t forget this important area. ● ● C hoose your clients to match your risk appetite – From discussions with accountants and bookkeepers in practice, it seems that most firms have at least one client that makes them feel slightly worried about what the client is up to. Either get the client to fall in with what you want or move them on.
27
Issue 49 | April 2019
| Professional in Payroll, Pensions and Reward |
Made with FlippingBook - Online magazine maker