ACCA welcomes new rules against money laundering and terrorist finacing 

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The keywords in fighting money laundering and terrorist financing throughout Europe and worldwide are transparency and consistency between EU rules and the international approach, says global accountancy body

In February 2013, the European Commission unveiled a package incorporating new Financial Action Task Force (FATF) international standards and an enhanced risk-based component into EU anti-money laundering law. It includes a directive – the so-called fourth anti-money laundering (AML) directive – on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, and a regulation on information accompanying transfers of funds.

For ACCA (the Association of Chartered Certified Accountants), the new directive demonstrates the EU’s determination to adopt the toughest international standards on tackling money laundering and the financing of terrorism. It has taken just over two years from the publication of the updated recommendations of the Financial Action Task Force for them to be incorporated into EU law.

John Davies, head of technical at ACCA says ‘ACCA, as a global accountancy body, is a longstanding supporter of consistency between EU rules and the international approach on anti-money laundering. The EU must be at the forefront of efforts to insist on the highest standards possible of business conduct. By doing so, it can set the best example to the rest of the world, and at the same time effectively drive compliance – as European companies will insist on their satellites adhering to the standards that apply to them. We therefore welcome the agreement in COREPER on a mandate that will hopefully allow constructive negotiations with the new European Parliament towards improved financial integrity.’

For ACCA, the corner stone to effectively fighting money laundering and terrorist financing throughout Europe – and worldwide – is transparency.

‘The new directive will devolve important new responsibilities to individual firms to identify and manage the particular money laundering risks that they face. While these responsibilities will be significant, they amount to a meaningful further step towards the reflection of proportionality in the regime’ John Davies points out.

ACCA also commends the new requirement for companies and other legal entities to record and make available details of their beneficial ownership.

John Davies explains: ‘This is of high importance to those in the financial services sector, but also to accountants in public practice and insolvency practitioners. This will be of great help to them in their efforts to identify the beneficial owners of companies and trusts with whom they enter into business relationships. Being active players in helping to fight money laundering, auditors, external accountants and tax advisors are obliged to comply with a number of provisions, in particular customer due diligence measures, reporting and record keeping obligations, establishing internal procedures as well as raising awareness, training and supervising their staff.’

In addition, the extension of the list of money laundering crimes to cover tax offences will have a significant impact on accountants and lawyers in those member states where such wrongdoings are not currently dealt with as money laundering offences.

‘It will mean that regulated persons will need to consider making suspicious transaction reports when they come across information that suggests that a client has committed such an offence. The addition of tax offences to the AML regime will establish a level playing field on this key issue’ stresses John Davies.

‘Money laundering deprives economies of capital and governments of revenue, distort fair competition in business transactions and betray the trust of stakeholders. Fighting it is crucial, especially in the current severe economic context that imposes significant efforts on EU citizens and businesses. Accountants are in a pivotal position to make a difference in this area, and ACCA is determined to ensure that its members across the world have the skills, training and the professional encouragement to do so’ John Davies concludes.

 

Source: ACCA

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