Accountancy Europe submitted its feedback on the EU Anti-Money Laundering Authority’s (AMLA) draft ITS on the format to be used for the reporting of suspicions (SARs) and for the provision of transaction records.
In its submission, Accountancy Europe supports the objective of establishing a common reporting format across obliged entities. However, it does not consider that the proposed approach, in its current form, achieves the necessary balance between harmonisation, quality and efficiency of reporting.
Accountancy Europe highlights several key recommendations in its submission, in particular:
The reporting requirements are not sufficiently proportionate or adapted to the operating models of the different obliged entities covered. A number of Technically Required data points have been designed primarily with the reporting models of credit and financial institutions in mind. While such information may be routinely available to financial institutions, it is not routinely available to accountants and auditors reporting suspicions arising from professional engagements.
The reporting template should therefore better accommodate the different operating models of obliged entities by ensuring that data points which are not routinely available in the context of accountancy services are generally classified as Mandatory if Available, rather than Technically Required.
Technical validation requirements should not delay or prevent the timely submission of suspicious activity reports. Where obliged entities are required to obtain information that is not available to them, there is a risk that reporting may be delayed while attempts are made to obtain the missing information.
In some circumstances, such delays may also increase the risk of tipping-off, particularly where attempts to obtain additional information could alert the customer to the existence of a suspicion. AMLA should therefore clarify how the validation and submission process should operate where a reporting obliged entity has a well-founded suspicion but information classified as Technically Required is legitimately unavailable, and ensure that this does not prevent the submission of the report.
Greater clarity is needed not only in the definitions of individual data points, but also regarding their intended application to the different categories of obliged entities covered by the ITS.
AMLA should therefore review the definitions, terminology and intended application of the data points from the perspective of the different obliged entities covered by the relevant templates and provide sector-appropriate definitions and practical examples where necessary. This would help ensure that the harmonised data points are understood and applied consistently across sectors.
Smaller and medium-sized practices are likely to face particular challenges and will require practical guidance and support.
