AML Across the Praxity Alliance
Anti-Money Laundering is a huge and growing issue for the accounting industry. With technology and artificial intelligence changing at a quickening pace, alongside fluid financial regulation and new incentives for crime, it is not going away soon. Recognising money laundering and knowing how to tackle it remain pressing concerns. Either unwittingly or knowingly, accountancy professionals can enable criminals to prosper if the warning signs are not spotted, ignored or not acted upon quickly. It is essential that accountants are trained properly, aware of present risks and dialled in to legislation in the jurisdictions they operate in.
Praxity Alliance member firms, for their part, are careful to leave no ambiguities, seeing the control of illegal and illicit money as a key part of their business mission. This extends from high professional standards to initiatives designed to address specific problems in their regions. The subtleties of each jurisdiction may vary, but the wide range of potential routes by which financial crime happens mean that action touches every aspect of operations.
In all likelihood, all Praxity member firms will have robust measures in place to be assured that neither they nor their clients are at risk. Below are some examples from across the Alliance -
Moores Rowland, Indonesia
In the Asia-Pacific region, Moores Rowland of Indonesia have taken robust steps in their auditing process, authoring measures to eradicate human rights abuses in their clients’ supply chains, as well as in the firm’s own.
In 2012, Moores Rowland Indonesia (then trading under the name of Mazars Indonesia) received the inaugural International Accounting Bulletin “Audit Innovation of the Year” award for its Human Rights Audit Practice. In the process of the audit, the firm uses indicators it developed, covering forced labour, child labour and young workers, along with factors such as the conditions of employment and work, non-discrimination, freedom of association and workplace health and safety. Community and environmental impact and supply chain management are also considered in the audit. In making the award, the IAB judges suggested that these indicators could set a benchmark for global best practice.1
The abuse of labour practices, modern slavery and child labour are common ways in which illicit money is procured and protected. This helps to demonstrate the reach of money laundering, as the further capital gets away from legal systems, the less it is exposed to restraint and scrutiny by the wider world. The indicators that Moores Rowland developed were based closely on the UN Guiding Principles on Business and Human Rights, as well as Indonesia’s own action on human rights due diligence for business, the Indonesia National Action Plan on Business and Human Rights.
Moores Rowland, Indonesia
In the Asia-Pacific region, Moores Rowland of Indonesia have taken robust steps in their auditing process, authoring measures to eradicate human rights abuses in their clients’ supply chains, as well as in the firm’s own.
In 2012, Moores Rowland Indonesia (then trading under the name of Mazars Indonesia) received the inaugural International Accounting Bulletin “Audit Innovation of the Year” award for its Human Rights Audit Practice. In the process of the audit, the firm uses indicators it developed, covering forced labour, child labour and young workers, along with factors such as the conditions of employment and work, non-discrimination, freedom of association and workplace health and safety. Community and environmental impact and supply chain management are also considered in the audit. In making the award, the IAB judges suggested that these indicators could set a benchmark for global best practice.1
The abuse of labour practices, modern slavery and child labour are common ways in which illicit money is procured and protected. This helps to demonstrate the reach of money laundering, as the further capital gets away from legal systems, the less it is exposed to restraint and scrutiny by the wider world. The indicators that Moores Rowland developed were based closely on the UN Guiding Principles on Business and Human Rights, as well as Indonesia’s own action on human rights due diligence for business, the Indonesia National Action Plan on Business and Human Rights.
Prime Solutions, Panama
Businesses in Panama have been subject to enhanced scrutiny since the 2016 data leak from law firm Mossack Fonseca, which demonstrated the extent of offshoring and tax evasion that had been operating in the jurisdiction. The much-publicised “Panama Papers” demonstrated how one rogue company can prop up corrupt businesses and regimes by helping them hide their profit, as well as how complex and multi-faceted the problem can be. It's important to be clear that while the name “Panama Papers” has been the public-facing description of the scandal, there is no suggestion of involvement by the Panamanian authorities or of any wrongdoing by other firms in Panama.
Praxity Alliance member firm Prime Solutions of Panama City has been at the forefront of subsequent measures ever since, with partner Giovanna Bernal leading the firm’s ISO 37001 Anti-bribery management systems certification. The process is rigorous and ongoing, with a huge degree of paperwork and due diligence and every level of the firm under the microscope. The firm’s staff receive ongoing training in anti-bribery and anti-money laundering, as well as in KYC and international tax rules. That the firm has attained such a certification under what are surely among the most stringent standards in the world is a remarkable achievement.
The firm has become one of less than twenty certified “compliance companies” in the country, guiding all kinds of industries through compliant routes. The written AML assessment tool that the firm authored has become widely used in the jurisdiction, with all Prime Solutions’ clients subjected to a risk-based approach when undertaking work. With multi-national or trans-national entities, the firm collaborates closely with fellow Praxity member JA Del Río to cover various jurisdictions in Latin America, leveraging the reach of the Alliance.
Furthermore, the firm provides ongoing training to other entities and sectors, extending their methods beyond their immediate business remit. The firm’s action demonstrates that they are fully committed to the law, becoming an authority in this technical area. Their actions, along with the work of fellow specialists and government agencies, has seen the country’s removal from the Financial Action Task Force's (FATF) financial crime “grey list” in October 2023.2
Prime Solutions, Panama
Businesses in Panama have been subject to enhanced scrutiny since the 2016 data leak from law firm Mossack Fonseca, which demonstrated the extent of offshoring and tax evasion that had been operating in the jurisdiction. The much-publicised “Panama Papers” demonstrated how one rogue company can prop up corrupt businesses and regimes by helping them hide their profit, as well as how complex and multi-faceted the problem can be. It's important to be clear that while the name “Panama Papers” has been the public-facing description of the scandal, there is no suggestion of involvement by the Panamanian authorities or of any wrongdoing by other firms in Panama.
Praxity Alliance member firm Prime Solutions of Panama City has been at the forefront of subsequent measures ever since, with partner Giovanna Bernal leading the firm’s ISO 37001 Anti-bribery management systems certification. The process is rigorous and ongoing, with a huge degree of paperwork and due diligence and every level of the firm under the microscope. The firm’s staff receive ongoing training in anti-bribery and anti-money laundering, as well as in KYC and international tax rules. That the firm has attained such a certification under what are surely among the most stringent standards in the world is a remarkable achievement.
The firm has become one of less than twenty certified “compliance companies” in the country, guiding all kinds of industries through compliant routes. The written AML assessment tool that the firm authored has become widely used in the jurisdiction, with all Prime Solutions’ clients subjected to a risk-based approach when undertaking work. With multi-national or trans-national entities, the firm collaborates closely with fellow Praxity member JA Del Río to cover various jurisdictions in Latin America, leveraging the reach of the Alliance.
Furthermore, the firm provides ongoing training to other entities and sectors, extending their methods beyond their immediate business remit. The firm’s action demonstrates that they are fully committed to the law, becoming an authority in this technical area. Their actions, along with the work of fellow specialists and government agencies, has seen the country’s removal from the Financial Action Task Force's (FATF) financial crime “grey list” in October 2023.2
LeitnerLeitner, Austria
In Austria, Praxity member firm LeitnerLeitner specialises in tax law and defending against criminal tax mistakes and evasion. They offer a range of Advisory services relating to tax law and risks under criminal financial law. They also help to minimise damage to business if an inadvertent mistake is made. This includes robust analysis of risks under financial criminal law, identification of suspected perpetrators, corporate responsibility, and the understanding of imminent sanctions and liabilities for their clients. The firm also provides their clients with support for their internal audits and investigations.3
LeitnerLeitner, Austria
In Austria, Praxity member firm LeitnerLeitner specialises in tax law and defending against criminal tax mistakes and evasion. They offer a range of Advisory services relating to tax law and risks under criminal financial law. They also help to minimise damage to business if an inadvertent mistake is made. This includes robust analysis of risks under financial criminal law, identification of suspected perpetrators, corporate responsibility, and the understanding of imminent sanctions and liabilities for their clients. The firm also provides their clients with support for their internal audits and investigations.3
VBR, Brazil
In Brazil, Praxity member firm VBR feature fraud detection and prevention as an important tenet of their client offering, making it part of their suite of Consulting tools. The firm emphasises the human impact as well as the damage to business:
“The risk of fraud is still taboo in most organisations, but it is an existing risk that managers need to be aware of. With specific fraud prevention and detection methodologies, VBR Brazil has been helping its clients effectively and discreetly, without neglecting the human aspect when dealing with an issue that requires special care for people within the company.” 4
VBR, Brazil
In Brazil, Praxity member firm VBR feature fraud detection and prevention as an important tenet of their client offering, making it part of their suite of Consulting tools. The firm emphasises the human impact as well as the damage to business:
“The risk of fraud is still taboo in most organisations, but it is an existing risk that managers need to be aware of. With specific fraud prevention and detection methodologies, VBR Brazil has been helping its clients effectively and discreetly, without neglecting the human aspect when dealing with an issue that requires special care for people within the company.” 4
Mazars, UK
In the UK, Mazars have a team that oversees Financial Crime Risk Management and Compliance, helping their clients to tackle money laundering, fraud, bribery, corruption and other financial crime. Recognising the damage that money laundering and fraud do to reputations as well as bottom lines, the firm steer compliant routes through legislation and identify areas of business that are most at risk. Mazars’ definition of fraud is reassuringly broad, which includes but is not limited to the following poles –
- Money laundering and terrorism financing
- Sanctions breaches
- Bribery and corruption
- Fraud
- Cybersecurity and data protection
- Tax evasion
- Insider dealing and market abuse
The team helps with designing and implementing or reviewing and recommending improvements to whistle-blowing programmes, which allow employees and third parties to speak up if something is amiss. The firm also runs an initiative – “Our Business. For Good” – which emphasises responsible business practices, both internally and to their clients:
“Not only do we provide professional services, but we advocate to the wider community to act responsibly and protect themselves from financial crime and dishonesty. Our Business. For Good™ global initiative encourages business leaders to ‘think and act long-term’ in order to enhance business performance and pursue profit responsibly for the benefit of companies, their stakeholders and wider society.”5
Mazars, UK
In the UK, Mazars have a team that oversees Financial Crime Risk Management and Compliance, helping their clients to tackle money laundering, fraud, bribery, corruption and other financial crime. Recognising the damage that money laundering and fraud do to reputations as well as bottom lines, the firm steer compliant routes through legislation and identify areas of business that are most at risk. Mazars’ definition of fraud is reassuringly broad, which includes but is not limited to the following poles –
- Money laundering and terrorism financing
- Sanctions breaches
- Bribery and corruption
- Fraud
- Cybersecurity and data protection
- Tax evasion
- Insider dealing and market abuse
The team helps with designing and implementing or reviewing and recommending improvements to whistle-blowing programmes, which allow employees and third parties to speak up if something is amiss. The firm also runs an initiative – “Our Business. For Good” – which emphasises responsible business practices, both internally and to their clients:
“Not only do we provide professional services, but we advocate to the wider community to act responsibly and protect themselves from financial crime and dishonesty. Our Business. For Good™ global initiative encourages business leaders to ‘think and act long-term’ in order to enhance business performance and pursue profit responsibly for the benefit of companies, their stakeholders and wider society.”5
"All Too Familiar"
The Institute of Chartered Accountants in England and Wales (ICAEW) have produced a high-quality training film titled “All Too Familiar”. The piece portrays a situation that develops in dangerous ways owing to a lack of due diligence in accounting. This includes consequences for the client, the accountancy firm and society at large. It depicts how warning signs and whistleblowers are ignored owing to longstanding trust in a client, as well as where making exceptions for favoured clients can lead.
“If this film saves one person from being trafficked, prevents one corrupt official stealing money from their country's citizens or stops one international crime group being able to steal UK tax it will have served its purpose.”
– Simon York, Director of Fraud Investigation Service, HMRC.6
The film is available to all Praxity Alliance member firms and their staff through our portal, free of charge, and we urge professionals within the Alliance to take advantage of this high-quality resource.
For more details on how member firms can make use of the film, please contact cpe@praxity.com.
Working together as independent experts, professionals across the Praxity Alliance stay connected in a united front against financial crime. Money laundering may be complex, but with agility and vigilance, member firms are uniquely placed to confront it.
To read Praxity’s latest Thought Leadership piece about the Changing Face of Money Laundering, please follow this link.