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Money Laundering: Criminal record (DBS) checks for BOOMs

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Many of you will recently have received a letter from ICAEW, or whoever your supervisory body is for money laundering purposes, regarding the need to carry out criminal record checks (called DBS or Disclosure and Barring Service checks) for all of the “BOOMs” in your firm. A BOOM is one of the following, with the acronym being a handy way to describe them:

  • Beneficial Owners – anyone holding more than 25% (including indirectly) of a firm
  • Officers – principals of the practice
  • Managers – from the perspective of the Money Laundering Regulations.

Before you panic at the enormity of this task note that the managers category does not mean everyone you call a manager. Instead it is those who are responsible for compliance with the Money Laundering Regulations, so will include your MLRO (Money Laundering Reporting Officer (who might also be known as your MLNO, your Money Laundering Nominated Officer)), your MLCP (Money Laundering Compliance Principal) if separate from your MLRO and any deputies.

Why is this needed

Regulation 26 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) require that supervisory authorities (eg. ICAEW, ACCA, AAT) approve all BOOMs from 26 June 2018. Approval is only granted if the BOOM does not have a relevant criminal conviction.

The Regulations set out a long list of the relevant offences in Schedule 3, though they can be summarised as those involving:

  • lying (eg. perjury)
  • monetary crime (eg. fraud/tax evasion/money laundering).

Whilst the MLRs do not specifically state that a DBS check must be carried out, they do require the supervisory authority to establish that no BOOM has a relevant unspent criminal conviction.

It isn’t sufficient for the supervisory bodies to rely on self-certification and so it is necessary to carry out a DBS or equivalent check by 26 June when the Regulation comes into effect. Even if one was previously sought for a BOOM for any purpose, it will need to be repeated if it is more than three months old, though once done, it does not need to be done on a recurrent basis.

How can I get the checks?

You can either use a reputable agency (such as one you use for money laundering checks now if they are able to carry out a DBS check) or apply direct, according to your location, as shown in the links below. You need a basic (rather than enhanced) DBS check for these purposes.

England & Wales   Disclosure and Barring Service
Scotland   Disclosure Scotland
Northern Ireland   Access NI

You will need quite a bit of information in order to complete the process, for example the DBS system in England asks for:

  • all your addresses for the last five years and the dates you lived there
  • your National Insurance number
  • a debit or credit card (presumably to pay the £25 fee)
  • proof of your identity, for example a passport, valid driving licence or birth certificate (if you haven’t used GOV.UK Verify before).

If you haven’t already registered on the GOV.UK Verify, then you will also need to set up an account which will take around 15 minutes.

I’ve done the checks, now what?

If you discover that a BOOM has a relevant unspent conviction you must report this to your supervisory body. For instance, for ICAEW you would report by completing a “complaints form”. If all the DBS forms are “clean” then you need to keep them filed safely, unless you have been asked to send them to your supervisor (which may occur if your firm is considered high risk). Certificates will be checked as part of regulatory visits, for instance practice assurance visits. If a BOOM is convicted of a relevant criminal offence in the future, this must be reported to the supervisory body within 30 days of the firm becoming aware of the conviction.

Some processes and procedures may differ slightly depending on your supervisory body, so ensure you read anything that they send you or their online guidance carefully. Here are some links to relevant professional body DBS information:

ACCA

AAT

ICAEW requirements

ICAEW FAQs

In conclusion though, you need to swiftly start gathering the information needed to request DBS checks for your BOOMs.