By Vish Gain for AML Intelligence
Accountants and auditors will play an enhanced role in anti-money-laundering once the EU implements its upcoming single AML rulebook to harmonise supervision and enforcement, says EY Managing Partner Julie Teigland.
Professionals in the financial services world such as accountants and auditors who have a crucial role in transaction monitoring and compliance need to be viewed differently by authorities, said Teigland, who leads EY in Europe, the Middle East, India and Africa.
“Monitoring is not uniform across the EU, including how authorities view accountants to help them with that monitoring — such as through regular compliance assurance. This is where accountants could make a cost-effective additional contribution to AML,” she told an AML Intelligence conference Monday.
“But such a change would need to be carefully considered by the Commission, and any new EU single regulator to really understand the implications, the cost and the benefits.”
Comparing the standalone AML supervisor to the single supervisory mechanism developed in response to the 2008 financial crisis, she said that the EU can learn some lessons as it attempts to harmonise enforcement and supervision in the bloc.
“The need for a more granular and precise legislative framework, one which is less subject to the diverging implementation also has to be balanced with the required flexibility to accommodate several national approaches,” she told the conference with over 1,000 delegates.
“The single rulebook must facilitate a flexible and agile response to specific local money laundering and terrorist financing risks.”
Teigland said that accountants and auditors, such as those in EY, already play a crucial role in the AML fight in the following ways:
- Accounting and auditing firms have AML/CTF obligations such as KYC procedures
- All professional accountants are bound by EU regulations, local regulators and the IESBA code of ethics
- They provide services in regulatory compliance, including specialist AML and CTF advice, forensic investigations and internal audit outsourcing
- They analyse the effects of non-compliance with laws and regulations to determine whether there’s any impact on financial statements
Single rulebook could become global norm
Public-private partnerships, such as Transaction Monitoring Netherlands (TMNL) — a collaboration between the largest Dutch banks to monitor transactions — are also important for the sharing of data necessary to fight money laundering, and global firms such as EY are joining in.
“In the Netherlands, we’re developing a platform and collaborating with public entities to enable the sharing of views and learning. We’re in favour of the creation of well-functioning public-private partnerships through the sharing of data necessary to fight money laundering,” Teigland said.
“In Germany and Luxembourg, EY accountants and auditors perform procedures as banks such as testing internal AML controls, while globally, we are represented at the World Economic Forum Partnering Against Corruption.”
Emerging technologies such as behaviour analytics, AI, machine learning and robotics, she said they can all help to support banks that have been traditionally reliant on the manual investigation process for suspicious activity to be flagged, she said, referring to EY’s compliance platform that allows clients to digitally manage compliance to AML and CTF obligations.
“This allows them to identify what needs to be complied with and how to become compliant as well as monitor,” Teigland said.
Acknowledging the benefits of greater harmonisation through the single rulebook, she said that a robust supervisory model will help all stakeholders make “decisive progress” towards shared objectives.
“When this objective can be realised in 19 different countries speaking 19 different languages and having different national supervisory cultures, the EU could set an example for what could be achieved on the global level in the future,” she said.
“And this pandemic has given us an understanding of the collective responsibility we all bear and tackle in global challenges.”
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