Anti-Money Laundering: Business Owners, Officers and Managers

IPA Insolvency Practitioner newsletter, February 2022

Contents

• Paul Smith, CEO
• Kevin Hellard, President
• Insolvency Service future of insolvency regulation consultation
• A reminder to Insolvency Practitioners about the limitations of their exclusion from FCA regulation
• HMRC update: Plastic Packaging Tax
• Anti-Money Laundering: Regulation 18 risk assessment
• Financial Conduct Authority: improving the Appointed Representatives regime consultation
• Upcoming events: earlybird Annual Conference booking rates and other important dates for your diary
• Exclusive discounts on training from the IPA and our partners
• IPA Board Elections
• Vacancy: Lay member of the IPA’s Anti-Money Laundering Committee
• Case law update

Business Owners, Officers and Managers are also known as ‘BOOMs’, and Regulation 26(1) of the 2017 Money Laundering Regulations advises that ‘no person may be the beneficial owner, officer or manager of a firm within paragraph (2) (“a relevant firm”), or a sole practitioner within paragraph (2) (“a relevant sole practitioner”), unless that person has been approved as a beneficial owner, officer or manager of the firm or as a sole practitioner by the supervisory authority of the firm or sole practitioner.’

IPs are listed within paragraph 2 of Regulation 26 and therefore require approval by your AML Supervisory Authority. You must ensure that no-one is appointed or continues to act as a BOOM of the firm or to act as a sole practitioner unless the person has been approved by the authority. However, an authority must grant the application unless the applicant has been convicted of a relevant offence (listed in Schedule 3 to the MLR17). Prior approval will also cease if a relevant person has been convicted of a relevant offence.

If you act as a BOOM without approval, p12 of Regulation 26 advises that you are guilty of a criminal offence. If you consider that you need approval, please send the BOOM information – which should include a DBS check – to aml@ipa.uk.com.

The IPA last requested details of BOOMs from all IPs and firms we supervise for AML purposes back in July 2018. We will shortly be contacting all of our supervised members to confirm BOOM details.

The detail below may assist in your consideration of whether you or a colleague may be a BOOM under Regulation 26.

Officer

This should include:

• a sole practitioner;

• a partner in a partnership (including a Scottish Limited Partnership (SLP));

• a member in a limited liability partnership (LLP);

• a director or company secretary in a limited company; and

• a member of the firm’s management board or equivalent.

This would only include equity partners in the LLP or partnership.

Beneficial owner

This should include:

• a sole practitioner;

• a partner, or LLP member, in a firm who:

• holds (directly or indirectly) more than 25% of the capital, or profits or voting rights; or

• exercises ultimate control;

• a shareholder in a limited company who:

• holds (directly or indirectly) more than 25% of the shares or voting rights; or

• ultimately owns, or exercises ultimate control.

Manager

This should include:

• the nominated officer (the MLRO);

• the member of the board of directors (or if there is no board, of its equivalent management body) or of its senior management as the officer responsible for the relevant person’s compliance with MLRs); and

• any other principal, senior manager, or member of a management committee who is responsible for setting, approving or ensuring the firm’s compliance with the firm’s Anti-Money Laundering policies and procedures, in relation to the following areas:

• client acceptance procedures;

• the firm’s risk management practices;

• internal controls, including employee screening and training for AML purposes;

• internal audit or the annual AML compliance review process;

• customer due diligence, including policies for reliance; and

• AML record keeping.