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HMRC internal manual

Money Laundering Regulations: Compliance

Accountancy Service Providers (ASPs): Introduction Accountancy Service Providers (ASPs)

MLR 2007 extended the scope of the Regulations to the Accountancy Service Provider (ASP) sector with effect from 15 December 2007. HMRC became the supervisory body for ASPs that are not affiliated to any of the accountancy bodies listed in Schedule 3 of the Regulations. The professional accountancy bodies are the supervisors for the ASPs that are affiliated to them. Prior to 2007 the Money Laundering Regulations 2003 required ASPs to comply with the Regulations but no supervisor was appointed. ASPs should therefore have been undertaking Customer Due Diligence procedures with effect from 1 April 2004. ASPs were given a deadline of 1 January 2009 by which they were required to register with HMRC.

Unlike other professions such as doctors or solicitors where it is only possible to practice after gaining a recognised qualification anybody can set up in practice and call themselves an “accountant”. The profession therefore consists of qualified and unqualified practitioners. In order to practice as a qualified accountant a person must gain entry to one of the professional accountancy bodies. This is done by training, passing the qualifying examinations and undertaking practical work experience. An annual membership fee is also payable. Once qualified, and a member of a professional body, an accountant becomes subject to the professional conduct rules of that body which include compliance with MLR.

Unqualified accountants are subject to supervision for MLR purposes by HMRC. Although unqualified, a substantial proportion will have participated in training courses but did not complete the training or either did not take, or failed the final examination. The unqualified sector also includes persons who were once employees of HMRC (often tax inspectors). Many unqualified accountants are therefore highly competent to perform accountancy work and view themselves as professionals. The sector also includes persons of limited competence whose work is regarded as poor by HMRC.

In addition HMRC is also the supervisor of qualified accountants who have allowed their membership of a professional body to lapse but who remain in practice. We would also be the supervisor for MLR purposes in any case involving a qualified accountant who has been expelled from membership of a professional body following a disciplinary hearing and who continues to provide accountancy services to clients.