Inspection Process
This comprehensive overview delves into the inspection process for tax advisers, covering key aspects such as regulatory compliance, risk assessment, customer due diligence, and post-inspection procedures. From pre-inspection requirements to compliance levels and corrective actions, this guide provides insights into the intricate process followed by regulatory investigators in ensuring adherence to legislation.
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Presentation Transcript
Inspection Process Tax Advisers John Conway Regulatory Investigator
Legislation Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 as amended Compliance Inspection Process Risk based approach to supervision Length and format of compliance inspection Outcome of inspection 2 An Roinn Dl agus Cirt | Department of Justice
Overview of Inspection process Notification of Inspection May be required to forward documents prior to the inspection (via a secure link) Inspection Day Examination of details of the Tax Adviser including its ownership, directorship, addresses and any other relevant details. Examination of documented business risk assessment Examination of the Tax Adviser s policies and procedures in place Examination of the details of any staff training Examination of the business s records to demonstrate compliance with the Act Customer Risk Assessment (High Risk/PEPs) Customer Due Diligence documentation (ID Verification, Source of Funds/Wealth, Ultimate Beneficial owner documentation) Examination of any suspicious transactions encountered by the business An inventory of documents supplied to the Authorised officer on the day will be drawn up and agreed 3 An Roinn Dl agus Cirt | Department of Justice
Overview of Inspection process Post Inspection Authorised officer reviews inspection material and drafts inspection report. Additional information may be requested. Report with findings and recommendations forwarded to the Competent Authority for review. The Competent Authority assess the findings and recommendations to determine the level of compliance and what corrective actions are required. There are 3 levels of compliance Compliant Partially Compliant Non-Complaint A letter with finding and directions/recommendations issued and a date by which corrective actions must be implemented. 4 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Risk Assessment Business Risk Section 30A -Business risk assessment (BRA) A tool to assist you to identify, assess and mitigate/control risk At a minimum, include risk factors specified under this section Honest appraisal and recognition that risk exists Use Schedule 3 and 4 of the Act to assist Overall risk rating to be specified by the Designated Person (e.g. Low, Medium-Low, Medium-High, High) Carried out on an annual basis, reviewed and signed off by senior management 5 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Risk Assessment Customer and Transactional Risk Section 30B Customer and transactional risk assessment (CRA) At a minimum, include risk factors specified under this section Risk based approach to the determine the level of customer due diligence (CDD) to apply Simplified Standard Enhanced Use Schedule 3 and 4 of the Act to assist score risk Assign individual customer risk rating and document the rationale behind the rating assigned and level of Customer Due Diligence applied 6 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Customer Due Diligence (CDD) Section 33-40 -Customer Due Diligence Simplified, standard, enhanced CDD Identification and verification of customers and all relevant parties Ultimate beneficial owner Intermediaries (may obscure UBO) Have regard to the source or customer s explanation of the source of funds Record of checking the Registers of Beneficial Ownership (RBO) and (CRBOT) Level of CDD applied must be appropriate to the level of risk (CRA) Section 40 Reliance on third parties to carry out customer due diligence. Third party reliance arrangements must be tested and reliance letters must be of a high standard 7 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Business Relationship Section 35 Measures applying to business relationships Nature and purpose of business relationship, risk based approach, prior to establishment of relationship Ongoing monitoring of business relationships with customers to the extent reasonably warranted by the associated risk Section 36A -Examination of background and purpose of complex transactions, unusually large transactions and/or unusual patterns of transactions which have no apparent economic or lawful purpose Must be considered in light of the nature of the business relationship and customer in determining what is complex or unusually large or what is an unusual pattern . Know your customer 8 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Politically Exposed Persons (PEP) Section 37 -definition expanded to include domestic PEPS Determine if customers or beneficial owners are politically exposed persons or an immediate family member or close associate of a PEP Evidence additional searches and checks have been carried out (e.g. screenshots of open source checks conducted) Senior management approval required prior to commencing business relationship Determine the source of wealth and source of funds Evidence that enhanced due diligence has been carried out PEP register 9 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Suspicious Transaction Reporting (STR) Section 42 requirement to report knowledge, suspicion or reasonable grounds for suspicion Internal policies, controls and procedures should document the procedure to follow from detection to reporting Registration on GoAMLand ROS Dual reporting to both the Garda Financial Intelligence Unit (FIU) and the Revenue Commissioners Documented explanation as to why a STR was not submitted if suspicion detected Note: Tipping off is an offence 10 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Staff Instruction & Training Section 54(6) all persons involved in the conduct of the designated persons business are (a) Instructed on the law and (b) That appropriate ongoing training is provided Provide copies of training material, training attendance records and information relating to the method of delivery and how often training is delivered/refreshed 11 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Internal Policies & Procedures Section 54 Internal policies, controls and procedures in relation to the business to prevent and detect ML/TF Flows from the Business Risk Assessment Section 54(3): Document controls for CDD, Risk, Monitoring, STRs, Training, Records Documented, signed and dated Evidence of approval at senior management level Reviewed as and when required and/or on an annual basis Section 54(6A) Internal protected disclosure policy 12 An Roinn Dl agus Cirt | Department of Justice
Overview of Obligations Record Keeping Section 55 Keeping of records by designated persons Demonstrates compliance Keep appropriate records demonstrating procedures applied and information obtained in relation to each customer Keep appropriate records evidencing the history of services and transactions carried out in relation to each customer Records shall be retained for a period of not less than five years after the last transaction. Orderly presentation of files and records allows for ease of review Information provided after inspection may not be taken into consideration 13 An Roinn Dl agus Cirt | Department of Justice
Questions? Website: www.amlcompliance.ie Email: antimoneylaundering@justice.ie Telephone: 01 602 8400 14 An Roinn Dl agus Cirt | Department of Justice
