The services offered by accountants and bookkeepers are vulnerable to money laundering activities due to their link to financial transactions, such as money transfers, trust account deposits, as well as the establishment of legal entities to hold assets.

Some services provided by accountants and bookkeepers may be attractive to criminals seeking to avoid detection and may raise red flags when accessing the financial system.

The services offered by accountants and bookkeepers may also have become more attractive to criminals over the past few years as the financial sector has implemented comprehensive AML/CTF measures.

The Money Laundering and Terrorist Financing (ML/TF) risks associated with the accountancy profession include:

• Criminals may seek to conduct their financial activity through an accountant to disguise their criminal involvement
• Criminals may seek out accountants as gatekeepers to the financial system to give the impression of respectability and legitimacy
• Criminals may misuse accountants’ trust accounts for deposits or international wire transfers to avoid detection
• Criminals may seek the assistance of accountants to establish companies or trusts which they use to obscure who really owns or controls the funds and assets.

Accountants must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures. This is a critical first step in complying with AML/CTF laws.

These are the services offered by accountants and bookkeepers that may be included as designated services under the AML/CTF Act.

• Acting as a formation agent of legal persons or legal arrangements
• Acting as, or arranging for a person to act as, a nominee director or nominee shareholder or trustee in relation to legal persons or legal arrangements
• Providing a registered office or a business address, a correspondence address, or an administrative address for a company, or a partnership, or for any other legal person or arrangement
• Managing client funds (other than sums paid as fees for professional services), accounts, securities, or other assets
• Engage in a transaction on behalf of any person in relation to the buying, transferring, or selling of a business or legal person (for example, a company) and any other legal arrangement
• Engage in a transaction on behalf of a customer in relation to creating, operating, and managing a legal person (for example, a company) and any other legal arrangement

If you offer or provide one or more of the above services, your business will be subject to AML/CTF obligations.

The AML/CTF regime is risk based, which means that your responses to the AML/CTF obligations placed upon you should be risk-based. 

A risk-based AML/CTF regime requires that you understand and address the Money Laundering and Terrorism Financing (ML/TF) risks associated with the services you offer.

You must then design, implement and maintain systems, procedures and controls that appropriately manage and mitigate your ML/TF risks.

Initialism are the AML/CTF experts, so you don’t have to be.

With over 30 years of expert knowledge and real world experience, our AML/CTF compliance solutions will to help you navigate your legal and regulatory requirements so that your business complies with its AML/CTF obligations in the fastest and most cost-effective way.

Initialism has a range of AML/CTF Program solutions to support your business in becoming AML/CFT compliant and maintaining compliance.