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New anti-money laundering legislation - is your business affected?

15 December 2007 saw the implementation of the new Money Laundering Regulations 2007 (the regulations). The regulations replaced those introduced in 2003, which became effective in 2004.

You may be affected because your own business is part of what has become known as the 'regulated sector'. Alternatively you may have dealings with businesses that are part of this sector. As accountants we are included, as are legal advisers, insolvency practitioners, estate agents, auditors, tax advisers and casino operators for example.

Personally, how might I be affected?

If you simply have dealings with those in this sector you may now find that, as part of what is known as ‘customer due diligence’, you are asked further questions about the ownership structure of your business. You may also be asked to provide documentary evidence in respect of your own identity. While you may have become used to providing this type of information when first becoming a client, the new regulations extend the requirements to existing clients.

Of course, if you have been a client for a number of years it may be that the organisation that you are dealing with already has sufficient information to satisfy the legal requirements in this area. Your normal contact will no doubt be in touch if any further information is required.

I'm in the regulated sector - how might I be affected?

In the first instance you should look to your supervisory or trade body for further guidance. If you are a:

• high value dealer,
• money service business,
• trust or company service provider or
• an accountancy service provider,

and you are not already supervised by another authority or professional body named in the regulations, then you must register with HMRC. You must also ensure that you have anti-money laundering systems in place. The detailed requirements can be found on HMRC's website at www.hmrc.gov.uk/mlr.

In brief the regulations require those affected to have a wide range of systems in place to prevent money laundering and terrorist financing, including:

• customer due diligence and ongoing monitoring
• reporting procedures
• record-keeping
• internal control
• risk assessment and management
• compliance management and
• communication.

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