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Consultancy Notice – Assessing AML gaps in the accountancy sector

Author
Laure Brillaud
Date
29 August, 2017
Type
Article
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Call for tenders 

Application deadline: 6 October 2017

Purpose of Assignment

Develop a scoping paper and final report identifying strengths and weaknesses in the anti-money laundering policies and procedures of the accountancy sector. The research will involve a combination of risk assessment, gap analysis, and best practice research. This shall serve in the future as a basis to identify what practices, policies or behaviors would help the sector effectively combat money-laundering.

Background

 Recent scandals such as the Panama Papers have highlighted systemic weaknesses in the anti-money laundering (AML) systems of the global financial system, facilitating abuse on a massive scale with severe consequences for societies, businesses and citizens around the world.  Professionals such as accountants are at the forefront of the fight against money laundering playing an essential gatekeeping role in preventing, detecting and reporting suspicious activities.  In particular, the accountancy profession, engaged in audit and tax advisory services, among other services, exercises a trusted oversight role in financial reporting and advising on tax payments. Vulnerability of the sector to corruption and money laundering risks has been highlighted by the global anti-money laundering body FATF (Financial Action Task Force) and the recently released European Supranational Risk Assessment.[1] Other research has shown that higher standards and levels of compliance in audit and accounting positively influence perceptions of (lower) corruption. However, standards in the profession are not uniformly practiced or well enforced, and there remains a significant reliance on voluntary codes and their implementation. The recent adoption of new AML rules at national level and their concurrent revision at European level aim at closing legislative gaps and harmonising standards and practices across sectors. Yet, effective change will only happen provided strong engagement and commitment from the private sector. Transparency International is dedicated to supporting companies´ enforcement efforts, helping them be more responsive to emerging risks and a changing policy environment and facilitating the emergence of AML champions in the sector.

Project overview

 Transparency International (TI) is the global civil society organisation leading the fight against corruption and promoting good governance. TI is implementing a new three-year project – Advancing Stronger AML Private Sector Standards (ASAPS) – aiming to improve the implementation and effectiveness of anti-money laundering (AML) standards and practices in selected sectors including the accountancy sector.

The initiative will rely on the voluntary engagement of professionals in the sector, standard setters and experts to assess current challenges faced by the sector as well as weaknesses in standards and practices and propose policy solutions to make AML systems more effective. The ultimate objective is to enhance the role of the sector in the detection, prevention and reporting of the laundering of stolen assets.

Engagement with professionals from the accountancy sector will be ensured through the setting up of a Taskforce bringing together key actors in the sector at national, European or global levels (mainly professional associations and network of individual firms). The taskforce shall be composed of approximately 10-15 members and will be meeting twice a year. Guidance and inputs to the work of the taskforce will be provided by an Advisory Group composed of experts from academia, international organisations, civil society and regulators.

Project objectives and activities

The project’s objectives are to:

  • Identify the challenges faced by the sector in implementing effective AML systems
  • Identify, share and showcase best AML practices in the sector
  • Strengthen the overall effectiveness of AML systems in the accountancy profession
  • Raise awareness about AML standards and practices among professionals
  • Provide guidance to professionals on how to implement effective AML systems
  • Where issues of common interest are identified, advocate for policy change towards more effective AML standards

Scope of Services

The primary tasks of the consultant will be:

Develop, in consultation with members of the Taskforce and Advisory Group a scoping paper to be presented at the first meeting of the Taskforce

The scoping paper should:

  • Take stock of existing research and analysis on ML risks and effectiveness of AML systems in the accountancy sector.
  • Identify, on the basis of this research and analysis, the main sectoral risks and weaknesses in AML systems in the accountancy sector looking at legislative, enforcement, institutional challenges. Examples of those include challenges associated with the practical implementation of new European AML rules in the accountancy profession, data quality in customer due diligence procedures, the reporting of suspicious activities, the understanding and assessment of ML risks, the regulation of the sector.
  • Identify initiatives that have been carried out in this field by the accountancy profession, regulators or other stakeholders.
  • Identify ways in which this initiative can add value to past or existing initiatives.

Participate and present the scoping paper in the 1st meeting of the Taskforce scheduled for November – December 2017 (exact date TBC)

Develop, on the basis of the scoping paper and in consultation with members of the taskforce and advisory group, a final report which shall expand on the scoping paper and identify AML strengths and weaknesses in the accountancy sector. The final report shall involve a combination of risk assessment, gap analysis, and best practice research and shall serve as a basis to identify what practices, policies or behaviours would help the sector effectively combat money-laundering.

Participate and present the final report in the 2nd meeting of the Taskforce scheduled for May – June 2018 (exact date TBC)

Finalise the report based on the feedback received during the 2nd meeting of the Taskforce

Liaise with the Transparency International EU Office (TI EU) project coordinator on the production of the scoping paper and final report

Consult with members of the Taskforce and of the Advisory Group throughout the process either in writing, through phone interviews and / or during the meetings of the Taskforce

Outputs / deliverables

The primary outputs will be:

  • a scoping paper (approximately 10 pages)
  • a final report (20 to 30 pages) that will be produced and iteratively revised based on research and consultation with members of the Taskforce and the Advisory Group.

Timeline & Reporting

The consultant will complete the tasks according to the following timeline. The timeline is indicative and the exact timing of publication of each of the reports can be agreed with the researcher at the start of work. In conducting his/her work, s/he will report to the TI EU project coordinator.

Tasks Role of Consultant Timeline
Signing of contract Sign September 2017
Production of the scoping paper Prepare October – November 2017
1st meeting of the Taskforce Participate and present the scoping paper November – December 2017
Production of the final report Turn scoping paper into a gap analysis December 2017 – May 2018
2nd meeting of the Taskforce Participate and present the results gap analysis May-June 2018
Finalisation of the report Adjust gap analysis based on taskforce members’ written and oral inputs June – July 2018
Consultations with key stakeholders throughout the process Consult Taskforce members and Advisory Group in writing / through phone interviews and / or during taskforce meetings October 2017– July 2018

Tendering process

Tenders should be submitted, along with a recent sample of comparable written work and the CVs of the researcher(s), to lbrillaud@transparency.org at by 12.00 midday (CET) Friday 6 October 2017.

Offers up to €10,000 will be considered (inclusive of VAT)

Tenders will be reviewed by a panel of TI officers according to the following criteria:

  • Experience and track record of consultant
  • Experience and knowledge of anti-money laundering standards and regulations, business compliance and integrity systems, processes and procedures
  • Practical experience in the accountancy sector
  • Independence
  • Experience of conducting anti-money laundering risk assessments and gap analysis
  • Value for money
  • Quality of offer

[1]  COMMISSION STAFF WORKING DOCUMENT Accompanying the document Report from the Commission to the European Parliament and to the Council on the assessment of the risks of money laundering and terrorist financing affecting the internal market and relating to cross-border situations, COM(2017) 340 final}, pp. 144-147