Anti-Money Laundering: Regulation 18 risk assessment
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: Business Owners, Officers and Managers
- 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
Regulation 18 of the 2017 Money Laundering Regulations (as amended) advises that all relevant persons (i.e. IPs) must take appropriate steps to identify and assess the risks of money laundering to which your business is subject. The regulation lists the areas which must be taken into account in your risk assessment. A link to Regulation 18 to review the requirements can be found here.
Members should be aware of paragraph 4 of Regulation 18, which states, “A relevant person must keep an up-to-date record in writing of all the steps it has taken under paragraph (1) [to compile the risk assessment], unless its supervisory authority notifies it in writing that such a record is not required.“
The IPA will expect the record under Reg18(4) to be held and available as part of any inspection visit or AML compliance review.
Members are reminded that the IPA carries out a sample review of Regulation 18 risk assessments provided with licence renewals as part of our AML supervision work, and there are still examples where generic documents are provided which do not comply with the requirements of Regulation 18.
A Regulation 18 risk assessment must be particular to your firm and consider the types of appointment, industry specialisms etc. of the work that is undertaken by your firm. The assessment should be clear about what your firm’s higher money laundering risks are. This will highlight to your teams where Enhanced Due Diligence (‘EDD’) work must be carried out and ensure that all staff are fully alive to, and able to effectively manage, any potential higher risks from money laundering that may arise from work carried out.
To assist members with considering if your risk assessment is Regulation 18 compliant, or with any upcoming review of your risk assessment, the IPA has reviewed and updated our checklist to assist members with the matters that should be dealt with in a Regulation 18 risk assessment, as well as guidance to assist with drafting and reviewing other required AML policies and procedures. The checklist is not a substitute for a Regulation 18 risk assessment, but it is hoped it will act as a useful guide to ensure that you remain compliant with your responsibilities under the 2017 Money Laundering Regulations. The checklist is available on the new AML page of the IPA website and can be accessed here.