Accountants Play Crucial Role in Combating Money Laundering and Terrorist Financing

Strengthening the Fight Against Financial Crimes

Cairo, Egypt - In a bid to enhance the fight against money laundering (ML) and terrorist financing (TF), accountants across the Arab world are being called upon to play a pivotal role in ensuring compliance with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations.

Accountants as “Gatekeepers” of the Financial System

According to the International Arab Society of Certified Accountants (IASCA), accountants are vulnerable to money launderers and terrorist financiers due to their role as “gatekeepers” to the financial system. As such, it is essential for accounting firms - ranging from sole practitioners to large firms - and their staff to be familiar with the risks and crimes associated with ML and TF.

IASCA Guidelines for Accountants

The IASCA has issued guidelines to assist accountants in designing and implementing a Risk-Based Approach (RBA) to AML/CFT. The RBA involves identifying, assessing, and managing the ML/TF risk associated with accountants and their services. These guidelines recognize that different accountants providing diverse services may require varying levels of compliance.

FATF Recommendations for Accountants

Financial institutions with accountant clients are urged to identify, assess, and manage the ML/TF risk associated with these services. The IASCA’s guidelines emphasize the importance of complying with FATF Recommendations 22, 23, and 28, which specifically target designated non-financial businesses and professions (DNFBPs) such as lawyers, notaries, and accountants.

International Cooperation Against Financial Crimes

The FATF is an international task force established in 1989 to develop standards to combat money laundering, terrorist financing, and the financing of proliferation. The organization’s 40 Recommendations provide a comprehensive set of counter-measures against ML and TF, covering criminal justice systems, law enforcement, preventive measures in the financial sector, and international cooperation.

Arab States’ Response to FATF Recommendations

Arab States have included accountants in their AML/CFT systems. Accountants are now required to implement customer due diligence, other measures, and regulation and supervision of DNFBPs in accordance with FATF Recommendations 22, 23, and 28.

Regional Cooperation Against Financial Crimes

The Middle East and North Africa Financial Action Task Force (MENA-FATF) has been established as a FATF-style regional body to coordinate efforts against money laundering and terrorist financing in the region.

Conclusion

In conclusion, accountants play a vital role in combating money laundering and terrorist financing. The IASCA’s guidelines are designed to support accountants in their efforts to comply with AML/CFT regulations and contribute to the stability of the financial system.