As reported in Accountancy Europe the new EU Anti-Money Laundering Regulation (AMLR) is a major milestone in the fight against money laundering (ML) and terrorist financing (TF).
The AMLR provides detailed guidance on standard, simplified, and enhanced due diligence measures, including:
- Standard CDD Measures: identifying and verifying customer and beneficial owner identities, understanding the business relationship, monitoring transactions, and identifying PEPs.
- Simplified Due Diligence (SDD): applicable in low-risk situations, allowing for reduced scrutiny measures.
- Enhanced Due Diligence (EDD): required for higher-risk scenarios, including dealings with PEPs, requiring additional information gathering and scrutiny.
Outsourcing
The AMLR introduces new detailed rules for obliged entities that outsource their AML/CFT tasks, distinguishing the term ‘outsourcing’ clearly from reliance on other obliged entities
Enhanced obligations on beneficial ownership transparency
The requirements for due diligence on beneficial owners have been strengthened, with a refined definition of beneficial ownership to clarify the framework for identifying individuals who ultimately own or control legal entities and arrangements. Ownership interest in a corporate entity is determined by a threshold of 25% or more of shares, voting rights, or other ownership interests.
Obliged entities must also verify whether the customer or beneficial owners are subject to targeted financial sanctions (TFS).
A new definition for politically exposed persons (PEPs)
The AMLR expands the definition of PEPs to encompass “heads of regional and local authorities”, as well as “groupings of municipalities and metropolitan regions”. It also specifies that, for the functions of heads of state, heads of government, ministers, deputy or assistant ministers, and equivalent roles at the Union level or in third countries, siblings are also considered ‘family members’.
EU-wide ban for large cash payments
The Regulation imposes an EU-wide maximum limit of €10,000 for cash payments, whether in single or linked transactions. Member States may set lower limits.
Accountancy Europe has produced a factsheet that summarises the key provisions of the AMLR and highlights their implications for accountants, auditors, and tax advisors.
For audit cold file reviews and tailored training sessions explaining more about various topics like AML, Audit, FRS 102, please send a mail to john@jmcc.ie.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
- Our latest CPD Webinar on The Main Changes in Irish GAAP (recorded July 2024)
- Anti-Money Laundering Policies Controls and Procedures Manual (March 2022) — View the table of contents
- AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion you receive a CPD certificate for attendance in your inbox.
- Letters of engagement and similar templates—Please visit our website here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items bought together.
ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
