AML fines rising: compliance crucial despite COVID

AML fines rising compliance crucial despite COVID | AML fines rising: compliance crucial despite COVID
By James Nadal | 30th July 2020 | 2 min read

By Steve Murray

Keeping on top of the demands of anti-money laundering requirements is as crucial as ever, despite accountants working through an unbelievably challenging time due to the continuing coronavirus crisis.

Regardless of Covid-19, the rules remain in place and you must stay up to date. But we understand that AML can pose problems for you.

Checks take time; one accountant told us it takes them around an hour for each. And keeping up with the legislation can also be a chore when there are so many other demands on your time.

Remembering to reassess clients regularly can slip through the net. And of course the recent lockdown has made ID checks more onerous.

New rules hit before pandemic

Given the new AML rules - the Fifth Money Laundering Directive - came into effect in January, prior to the Covid-19 chaos, there will little leniency shown for advisors not being on top of its requirements.

Thankfully 86% of those who took part in our recent webinar felt that AML remains a priority during the pandemic, which is a good job given money laundering continues to be a massive issue and penalties are on the up.

AML fines are on the rise

Fines levied at businesses rose from £60m in 2018 to £393m in 2019, and AML accountancy fines soared by 24% to £147,549. It’s a big jump and liable to keep rising.

In addition, it was reported last week that the Treasury will make a £100m investment in improving AML systems, funded by a levy on financial institutions.

This will pay for more investigators and better technological capabilities for the National Crime Agency to deal with illicit finance issues. This is believed to signal an uplift in enforcement activity from the Government.

It is clear to see why such action is needed though: this is a big problem with major ramifications.

Mass evasion of AML checks

According to the global independent media organisation, openDemocracy, nearly 400,000 British companies evade AML checks and almost one in 10 do not declare persons of significant control.

In Scotland alone, just four opaquely-owned businesses processed $7bn through their accounts. For context, that’s the same amount as a year’s worth of Scotch whisky exports!

While the Government believes that 99% of firms are compliant, the damage that the 1% can cause – including to the reputations of accountants falling foul of AML regulations – is significant.

It was a relief to see on our webinar poll that 70% of those taking part have AML software on their agenda for this year.

How can technology help with AML compliance?

A solution that takes the pain out of compliance and makes life easier for busy practitioners cutting time and hassle must be worth considering.

We have AML compliance software that is quick and easy to use, efficient and covers you. IRIS Elements AML helps you to manage the documentation, electronic checks, risk assessment, train staff and minimise costs. 

Visit our dedicated AML page for all the answers to AML such as what is anti-money laundering and more.