The guidance notes provide information on where accountants and law firms are likely to be most vulnerable to money laundering and terrorism financing (ML/TF). The documents are well written – clear and concise – and our recommendation is that you include them as part of your staff training so anyone who deals directly with customers can identify red flags.

Below are examples of services provided by accountants and law firms that the DIA categorise as “at risk”. This is just a snapshot of the “at risk” services outlined in the guidance notes and each comes with a corresponding list of customer red flags so you and your team can understand the different methods used by criminals and what to look out for when you are engaging with customers.

Key points for law firms:

• Purchase of real estate is a common outlet for criminal proceeds. This is particularly so for the sale of a property that is unencumbered, or the purchase of a property without finance or using private lending arrangements.
• Routing funds through law firm trust accounts under the appearance of an investment related transaction is a way to obscure the origin of money and to add an appearance of legitimacy to transactions being undertaken.
• The use of charitable or non-profit organisations is also a method that criminals use to launder money or to finance terrorism.

Key points for accounting firms:

• To try to hide their criminal activities money launderers may avoid accessing banking and financial services directly. One way to do this is to use the trust accounts or other professional services of accountants. This obscures the trail of funds changing hands and adds an appearance of legitimacy to the transactions.
• Accountants that provide services of acting or arranging for someone to act as a trustee or a nominee director, nominee shareholder or nominee general partner should identify the beneficial owners and establish the reason why this arrangement is required and its legitimacy.

If you haven’t already, we recommend you read and circulate the guidance notes amongst your team. You can find them here:

Money Laundering and Terrorism Financing Risk Summary – Accountants 

Money Laundering and Terrorism Financing Risk Summary – Law Firms

If you have any questions about any of the points raised in the guidance notes don’t hesitate to give our team a call – we’re here to help.