The accounting profession is a diverse sector with accountants that vary substantially in the breadth and nature of services they provide, the clients they serve and the size and level of sophistication of the firm and its employees.
The legally required services that accountants provide make them vulnerable to become unwittingly involved or accessory to money laundering or terrorist financing activities. Recent FATF research highlighted examples of accountants that had used their occupation, business infrastructure and knowledge to facilitate money laundering for criminal clients. For example, professional money launderers have been known to keep a shadow accounting system with records of transactions involving proceeds of crime. Accounting and related auditing firms must therefore protect themselves from misuse by criminals and terrorists.
The accounting sector must meet customer due diligence and record-keeping requirements when, on behalf of their client, they are involved in real estate transactions; managing money, securities or other assets; managing bank, savings or securities accounts; creating, operating or managing companies, or legal persons and arrangements and buying and selling business entities.
This guidance highlights the need for a sound assessment of the ML/TF risks that accountants face so that the policies, procedures and ongoing CDD measures mitigate these risks. The risk-based approach is central to the effective implementation of the FATF Recommendations to fight money laundering and terrorist financing.
This guidance is aimed at practitioners in the accountancy profession; countries and their competent authorities, practitioners in the banking sector, and other financial and designated non-financial sectors that rely on the customer due diligence performed by accountants.The guidance aims to support accounting professionals in the design of effective measures to manage their ML/TF risks, when establishing or maintaining business relationships. In particular, it clarifies the obligation for accountants to identify and verify beneficial ownership information.
The guidance contains a section for supervisors of the accounting profession. It explains the risk-based approach to supervision of this profession, as well as the supervision of the risk-based approach to ensure that accounting professionals manage their risks effectively. The guidance highlights the importance of supervision of beneficial ownership requirements and nominee arrangements so that up-to-date information on legal persons and legal arrangements is maintained and available in a timely manner.
The FATF developed this non-binding guidance with significant input from the profession itself, including through a public consultation in March 2019, to ensure that it reflects the experience gained by public authorities and the private sector over the years. It replaces the version of 2008 and brings it in line with the current FATF Recommendations.