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CIMA working to beat fincrime

By Elaine Smyth, Associate Director, Professional Standards, Association of International Certified Professional Accountants

As a professional body, CIMA® plays an important role in helping to reduce economic crime. The U.K. government recently delivered a progress report on its first Economic Crime Plan (ECP), published in 2019. Elaine Smyth explains what the Institute does to help fight fraud, money laundering and terrorist funding.

Illicit finance underpins all serious and organised crime. The government estimates it costs the U.K. about £37 billion per year.

The ECP, an ambitious programme that runs from 2019 to 2022, has seven strategic priorities and 52 actions. Its simple, though enormous, purpose is to reduce economic crime and depends on public and private sector partnerships for its outcomes.

‘Significant progress’ made

The Statement of Progress highlights new challenges because of the COVID-19 pandemic. Despite those, there has been significant progress made on the delivery of the plan.

Information was better shared across the system through the National Economic Crime Centre’s ‘Fusion Cell’ in 2020. This enhanced efforts to identify, disrupt and arrest financial criminals.

A strengthened anti-money laundering (AML) regime has increased requirements on firms  which, in turn, has helped to close system weaknesses.  

Proposals to make corporate information held by Companies House more transparent have progressed.

Finally, the government’s reform of the Suspicious Activity Reports regime is ongoing, with extra resources being allocated to the work.

Helping members spot criminal activity

 So where does CIMA fit into this? CIMA is a designated AML/ Counter-Terrorist Financing (CTF) supervisor under U.K. legislation.

In that role, CIMA provides robust AML/CTF supervision to its regulated members and liaises with other key stakeholders in reducing AML/CTF-related criminal activity.

Some of the ECP actions relate to AML/CTF but the plan is a much-wider attempt to address economic crime over and above AML/CTF.

Here are a few of the ways that CIMA works to help reduce financial crime.

  • Sharing AML/CTF information, best practice and understanding new threats:
    • CIMA is an active member (and holds the Vice Chair position) of the Accountancy AML Supervisors Group (AASG). The AASG provides an open forum focussing on sector-specific issues concerning AML/CTF obligations for supervised members and supervisory bodies.
    • CIMA is an active member of the Anti-Money Laundering Supervisors Forum (AMLSF), a forum for information/best-practice sharing among government, Financial Intelligence Units and professional body AML/CTF supervisors.
    • CIMA is a member of the Intelligence Sharing Expert Working Group (ISEWG) to advance and improve intelligence and intelligence-related information sharing between accountancy sector professional body supervisors, AML statutory supervisors and law enforcement agencies.
    • Providing information on current and emerging risks and threats for the U.K.’s 3rd National Risk Assessment on Money Laundering (published December 2020)
    • Improving information flows from law enforcement agencies through issuing alerts to regulated members on current and new financial crime threats
    • Distilling information from the National Risk Assessment and risk information from other accountancy bodies, law enforcement and FATF (the global Financial Action Task Force) and producing guidance relevant for management accountants
  • Improving the effectiveness of AML/CTF legislation:
    CIMA has begun supporting HM Treasury in its call for evidence for the upcoming review of the U.K.’s money laundering regulations and OPBAS regulations. The review aims to reduce unnecessary AML/CTF burdens on regulated businesses whilst strengthening the AML/CTF supervisory regime.

  • Supporting effective Suspicious Activity Reporting (SARs)
    • CIMA has been working with the National Crime Agency (NCA) and OPBAS to improve the quality of SARs and enable reporters to get the information right the first time to improve the effectiveness of the regime.
    • National Crime Agency — SARs Transformation Programme: CIMA and the ICAEW, through their AASG memberships, represent the accountancy profession within the NCA’s SARs IT Transformation Programme. They provide support to the NCA to ensure that upcoming changes support SARs users as effectively as possible. 
  • Transparency and accuracy of beneficial ownership information:
    CIMA responded to the ‘Corporate Transparency and Register Reform’ consultation and supported plans for Companies House to hold better quality/more accurate data that enabled greater transparency of the true ownership of businesses. In addition, CIMA ensures that its regulated members meet the legislative requirement of reporting discrepancies in beneficial ownership information to Companies House.

CIMA, powered by the Association of International Certified Professional Accountants, has a comprehensive set of resources to help members deal with this issue, including our Guide to combatting financial crime and key lessons for finance leaders dealing with financial crime during an economic downturn.

Management accountants play a central role in stemming illicit financial flows. Although progress has been made, the fight is not over. That said, we are certainlybuilding the momentum to ensure it will be.