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CRYPTOASSETS
FCA becomes AML and CTF supervisor of UK cryptoasset activities
The Financial Conduct Authority (FCA) is now the anti-money laundering (AML) and counter terrorist financing (CTF) supervisor for businesses carrying out certain cryptoasset activities under the amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs).
Any UK business conducting specific cryptoasset activities falls within scope of the regulations and will need to comply with their requirements.
Amongst other things, the FCA requires cryptoasset businesses to: ● identify and assess the risks of money laundering and terrorist financing which their business is subject to; ● have policies, systems and controls to mitigate the risk of the business being used for the purposes of money laundering or terrorist financing; ● where appropriate to the size and nature of its business, appoint an individual who is a member of the board or senior management to be responsible for compliance with the MLRs; ● undertake customer due diligence when entering into a business relationship or occasional transactions; ● apply more intrusive due diligence, known as enhanced due diligence, when dealing with customers who may present a higher money laundering or terrorist finance risk. This includes customers who meet the definition of a politically exposed person; and ● undertake ongoing monitoring of all customers to ensure that transactions are consistent with the business’s knowledge of the customer and the customer’s business and risk profile.
This is not an exhaustive list. More information can be found on the FCA’s webpage. It will proactively supervise firms’ compliance with the new regulations, and will take swift action where firms fall short of desired standards and cause risks to market integrity. New businesses carrying out cryptoasset activity in scope of the MLRs must be registered with the FCA before conducting businesses. Existing businesses already conducting cryptoasset activity before 10 January 2020 may continue their business but will need to ensure their compliance with the MLRs with immediate effect. All existing businesses undertaking cryptoasset activities must be registered by January 2021. To ensure
3 this deadline is met, these businesses must submit a completed application for registration via Connect by June 2020.
Existing Financial Services and Markets Act firms, e-money institutions or payment services businesses undertaking cryptoasset activity will also be required to apply for registration.
For any queries regarding the new regime, email firm.queries@fca.org.uk.
EMPLOYMENT PRACTICES
REGULATIONS
Legislating the Double Taxation Dispute Resolution (EU) Regulations 2020 On 22 January, regulations were passed relating to resolving tax disputes arising from the interpretation and application of tax treaties between the UK and member states. The measure will apply to questions in dispute relating to income or capital earned in a tax year commencing on or after 1 January 2018.
The regulations are likely to affect any person who is resident for tax purposes in a member state of the EU and whose taxation is directly affected by the interpretation and application of tax treaties between the UK and any other member state which results in double taxation for that person. The aim of this measure is to introduce a more effective and efficient framework for the resolution of tax disputes arising between the UK and other member states to ensure legal certainty and create a business friendly environment for investments in order to achieve fair and efficient tax systems across the EU. It builds on the United Kingdom’s network of bilateral tax treaties with other member states and on the existing Convention on the elimination of double taxation in connection with the adjustment of associated enterprise.
The regulations provide a mechanism specifically for member states to resolve disputes where double taxation occurs as a result of an upward adjustment of profits by one member state in respect of a connected party transaction where the other enterprise is tax resident in another member state.
Measuring the likely take up of this measure by businesses and individuals is challenging, as new cases will be triggered at the request of taxpayers inside and outside the UK. The two existing tax dispute resolution mechanisms (the Union Arbitration Convention and the UK’s network of bilateral tax treaties) will be unaffected by the introduction of this new measure. So, taxpayers may continue to use these pre-existing mechanisms in preference to the new measure. For more information, visit: bit.ly/2RGFAhz.
New analysis by Deloitte finds that poor mental health costs UK employers up to £45 billion each year. This is a rise of 16% since 2016 – an extra £6 billion a year.
The research also looks at how employers can tackle this problem, finding that it pays to support employees’ mental health. With one in six workers experiencing a mental health problem at any one time, and stress thought to be responsible for almost half of working days lost in Britain due to health issues, the relationship between mental health and the workplace is a complex one. The research makes a positive case for employers investing in mental health, showing that for every £1 spent on supporting their people’s mental health, employers get on average £5 back on their investment in reduced presenteeism, absenteeism and staff turnover.
Analysis from “Mental health and employers: the case for refreshing investment” also looks at how employers can tackle this problem. It shows that higher return on investment can be achieved by early interventions, such as organisation-wide culture change and education, than by more in-depth support that may be needed at a later stage when a person is struggling.
The latest research builds on work conducted by Deloitte in 2017 for the Stevenson-Farmer Review on workplace mental health, which calculated that poor mental health cost UK employers between £33 billion and £42 billion a year.
Since then, Deloitte has found that there have been positive changes in workplaces, including greater openness in discussing mental health at work, in larger employers in particular, and more provision of support overall.
HONG KONG
Hong Kong and Mexico sign investment pact
MALAYSIA
Malaysia Finance Act 2019 and other Amendment Acts published
Secretary for Commerce and Economic Development Edward Yau has signed an investment promotion agreement to enhance investor confidence, expand investment flows and further strengthen Hong Kong-Mexico economic and trade ties.
Mr Yau signed the Investment Promotion and Protection Agreement (IPPA) with Undersecretary of Foreign Trade at Mexico’s Ministry of Economy Luz María de la Mora Sánchez on the margins of the World Economic Forum (WEF) Annual Meeting in Davos. Under the agreement, the two governments will provide each other’s investors with fair, equitable and non-discriminatory treatment of their
© istockphoto/Oleksii Liskonih
investments, compensation in the event of expropriation of investments and the right to free transfers abroad of investments and returns.
It also provides for settlement of investment disputes under internationally accepted rules.
“An IPPA enables investors of the two parties to enjoy corresponding protection of their investments in the host economies, and thus enhance investors’ confidence in making investments abroad,” Mr Yau said. “Hong Kong has been making dedicated efforts to expand its network of IPPAs in order to enhance twoway investment flows and boost our economy.”
Malaysia’s Finance Act 2019 (Act 823) was published in the Federal Gazette on 31 December 2019, which includes certain measures of the 2020 Budget and others. The Finance Act 2019 also includes amendments to the Sales Tax Act for the introduction of the Approved Major Exporter Scheme. The scheme provides an exemption for qualifying persons from the payment of sales tax that may be charged and levied on taxable goods imported, transported from designated areas or special areas, or purchased from a registered manufacturer, under certain circumstances.
Further to the Finance Act 2019, Malaysia has also published the Income Tax (Amendment) Act 2019 and the Petroleum (Income Tax) Amendment Act 2019. Both Acts include similar amendments concerning the hearing of appeals by Special Commissioners and new rules on appeals to the Higher Court regarding questions of law in proceedings before the Special Commissioners.
The measures generally apply from year of assessment 2020, although the changed penalty for amended returns and the seven-year limit for requesting an appeal extension are effective specifically from 1 January 2020 and the Approved Major Exporter Scheme will apply from a date to be appointed by notification in the Gazette.
AIA NEWS
MONEY LAUNDERING
The Fifth Anti-Money Laundering Directive (5MLD) has come into force and introduces the requirement for “obliged entities”, including the Association of International Accountants (AIA) Members in Practice, to report certain information discrepancies to Companies House. From 10 January 2020, all obliged entities must tell Companies House if there’s a discrepancy between the information that they hold about a beneficial owner and information on the Companies House people with significant control (PSC) register.
The requirement extends to any obliged entity required to carry out customer due diligence under anti-money laundering regulations. Amendments to the regulations also include: ● requirements to collect proof of registration for entities; ● the requirement to inform Companies House of any discrepancies; and ● changes to client due diligence and enhanced due diligence.
The accountancy sector is currently drafting updated guidance on the regulations, which will then require HM Treasury approval before being released to members.
For further information go to: https://bit.ly/2GuE2kx.
AUDIT
AIA responds to Brydon Review
As a Recognised Qualifying Body (RQB) for statutory auditors, the Association of International Accountants (AIA) is committed to ensuring that auditors are trained to the highest possible standard and properly equipped to undertake their important role. It is vital for the public interest function that audit demonstrates more than just compliance with laws and rules. The UK government-backed review has called for the creation of an independent audit profession with a revised purpose to increase confidence and prevent unnecessary corporate failures. It also highlights improvements that recognised bodies can make to the training of auditors. AIA will work to incorporate them into its recognised qualifications and training.
Sir Donald Brydon, appointed in January 2019 to review the quality and effectiveness of audit, has proposed substantial changes to the sector in the United Kingdom, including strengthened standards for auditors, more responsibilities for company directors and additional powers for shareholders and stakeholders to influence audit.
The Brydon Review is the last of four reviews, including the Kingman Review to reform the Financial Reporting Council (FRC), to publish its recommendations and marks out a path for reform.
The Review considered how the audit process and product could be developed to better serve the needs of users and the wider public interest. It proposes a new definition of the purpose of audit, as well as the creation of a new “standalone and transparent” profession.
The final published report makes 64 recommendations and includes: ● a redefinition of audit and its purpose to reflect the public interest; ● the creation of a standalone and transparent audit profession; ● clarification that auditors should
seek to find corporate fraud and a requirement they are educated in forensic accounting and fraud detection; ● improved auditor transparency; ● new powers for shareholders to influence audit; ● additional reporting requirements for directors; and ● a responsibility for directors to explain the actions they have taken to prevent material fraud and to report on internal controls.
The recommendations are aimed primarily at the audit of Public Interest Entities (listed companies, and credit and insurance firms) in accordance with the Review’s terms of reference.
AIA chief executive Philip Turnbull said: “Responsibility and accountability are central to the success of the Review and the future of the audit profession and we will continue to work to improve and maintain confidence in the audit process and in the information for which they have responsibility to report, including the financial statements.”
CONFERENCE
COMMITTEES
© istockphoto/Mikolette
The AIA’s Examiner Conference which took place on 24 January 2020, brought together AIA’s academic team – representatives from over 20 leading UK universities – tutors, regulators, and online learning and assessment partners to discuss the final stages of the new AIA professional qualification, due to launch later this year.
The new professional qualification has been produced following extensive research into the financial skills sector and has resulted in an innovative new qualification format that provides a pathway to qualify as a professional accountant or statutory auditor with exceptional support services that come from being an AIA member.
This new nationally and internationally recognised qualification supports progressive career development across all finance roles and, with the introduction of a new ethics module, places professional ethics at its heart.
The conference included a workshop on computer-based exams, giving examiners the opportunity to see how AIA’s assessment software is used from both the exam-setting and candidate’s perspective and for the first time see the new qualification in conjunction with its learning materials, student support facilities and testing mechanisms.
Les Bradley, AIA President, said: “2020 is set to be a monumental year for the AIA as it launches both its new professional qualification and brand. Our academic team have worked tirelessly to produce an exceptional new professional qualification that will prepare students with the skills and abilities to become world-class accountants and I look forward to welcoming them at the AIA Examiner Conference. Embarking on a professional qualification is the first step in a very rewarding career and as AIA President I have seen the real benefits of AIA membership in providing the most in-demand skills for accountants throughout the world.”
AIA Chief Examiner Philip Shrives added: “With the impending launch of the new AIA professional qualification, the 2020 AIA Examiner Conference is a critical event where, after years of research and development, examiners and moderators will see the real impact of their contributions on the next stage of the AIA’s development.”
There were also presentations on the Brydon Review and the recommendations that aim to improve the quality and effectiveness of audit and a review of the economy from a national and regional perspective from the Bank of England. AIA committee member recruitment AIA is looking for accountants in practice and lay members of other professions to join the teams helping to ensure that our members always conduct their businesses in a professional manner and act in the best interest of the general public. The combination of accountants and lay members on our committees helps to maintain a balanced view.
what does it involve? As a member of one of the disciplinary committees, you play an integral part in supporting AIA in maintaining the highest professional standards and ethical conduct expected of a professional accountant.
Successful applicants may be in receipt of information of a sensitive nature and must therefore be able to sign a confidentiality agreement and adhere to AIA’s strict Equality and Diversity policy.
Meetings are held on an ad hoc basis and can be either in person or by video conference. Emailed correspondence may also be used. Membership of the Disciplinary Committees is non remunerated although reasonable expenses will be paid.
Next step To express an interest in becoming part of the process, please send your CV and any questions you might have to: council@aiaworldwide.com.
EDUCATION
AIA supports International Day of Education
Accelerating access to the accountancy profession is one of AIA’s main strategic goals and we are working with our partners throughout the world to reduce inequality and gender inequality in education.
AIA President Les Bradley said: “AIA wholeheartedly supports the Global Campaign for Education and through its own initiatives works to support education as a basic human right.
“Education is a key component in delivering economic growth, reducing poverty and increasing health and wellbeing. Therefore, it is vital that we recognise that by providing a strong educational foundation we support growth in many other areas. AIA works to ensure that everyone has an equal chance of accessing the accountancy profession based on merit, not background and is a member of Access Accountancy, which aims to deliver real change and welcome talented and ambitious young people
to the profession from all backgrounds, supporting social mobility.
“Outside the UK, AIA’s work as an Accredited Commonwealth Organisation seeks to promote the professionalisation of youth
work by supporting youth work education and training and setting competency standards throughout the Commonwealth and we will continue to use our knowledge and influence to deliver education for all.”
MENTAL HEALTH
AIA signs Time to Change Employer Pledge
8 AIA has signed the Time to Change Employer Pledge and agreed to an Employer Action Plan that puts best practice interventions and policies in place to help staff work in ways that promote a positive mental wellbeing.
The Time to Change Employer Pledge is a commitment to change the way we all think and act about mental health in the workplace and operates to end mental health discrimination. AIA will be implementing an approach that combines additional resources, information and guidance with training to help tackle mental health stigma, as well as introducing initiatives that support mental health and wellbeing.
Philip Turnbull, AIA chief executive, said: “Our employees are our greatest asset, and we’re committed to creating and nurturing a workplace culture that allows our people to thrive. A key part of our strategy is to create a safe, welcoming environment for our employees, where they feel empowered, listened to and that they can make a difference.
“Raising awareness of mental health issues and breaking down the stigma of talking about mental health at work is essential to achieving this goal and we’re fully committed to Time to Change and implementing our Employer Action Plan.”
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Our new look
It’s all a matter of style…
It has been a long time in the making, but we are now delighted to share our new rebrand with you following its official launch on 3 February.
Careful consideration has been taken throughout the rebrand process in order to not lose our identity; consciously maintaining selected brand elements from our rich heritage, and at the same time amalgamating them in a vibrant new primary colour with a revitalised modern look, tone of voice and dynamic feel. We strongly believe in our new brand and we envisage it being with us through to our next major milestone – our 100th anniversary in 2028!
Throughout the process, we have worked on the philosophy that change is good, but never to the detriment of what we have grown and nurtured over many, many years.
“Our brand is an integral part of the Association’s marketing and development strategy and a signifi cant part of how we interact with our members, students and other key stakeholders. In order to remain at the forefront of the accountancy profession, we must continually strive to be dynamic, creative and progressive in all that we do in order to provide our key stakeholders with the service they expect and deserve. There are exciting times ahead and our rebrand is a signifi cant step on our ongoing journey.”
Philip Turnbull, AIA Chief Executive
So, the question you may well be asking is: what has changed and what remains the same?
10 Colour Most noticeably the colour. The green is now gone and has been replaced with a vibrant red.
As a long-established worldwide association with a network of accountants in 80 countries globally, we had the challenge of developing a crossculturally appropriate colour palette. Simplicity is therefore key, which is why the primary palette has been limited to three colours: red, black and white. The world today places ever greater value on the visual, thanks to the rise and infl uence of social media and the ubiquity of screens in our digital age. AIA’s aim is for the brand to always look its best across all channels, meaning the consistent and appropriate application of colour. It defi nes us as an Association, dictates mood and helps us communicate our brand ethos.
Logo Aside from the colour change, we felt strongly that the logo maintained its primary characteristics; the instantly recognisable shield and griffin. These longstanding visual facets of our logo come from our original charter, albeit with a makeover to give them a fresher and more modern look and feel.
We understand the importance of our heritage, so we are proud to keep this symbol of our deeply engrained and rich history.
Strapline Our strapline – “Creating World Class Accountants” – will continue to be used in the majority of our external communications, as an inspirational statement that expresses what we continually strive to achieve. The strapline continues to underpin our brand philosophy and supports our brand values.
Typeface Typefaces are at the core of every visual identity, and ours is no different. Consistency is the essence of branding, and using the correct typeface is a crucial part of this. For this reason, we have decided to use Nunito Sans, which is a modern and freely available typeface. It also has the benefit of similar typefaces for our global markets, such as China.
Tone of voice An important factor in any rebrand is tone of voice. This is how we communicate, and part of our unique personality as an Association, which manifests itself in every contact and situation with people both internally and externally.
Our values and personality bring an emotional richness to the AIA brand and are refl ected in our tone of voice. When communicating, we will always look to follow these simple principles:
● Be Empowering ● Be Informative ● Be Clear ● Be Professional ● Be Enthusiastic ● Be Consistent
What’s next? We all operate in fast paced, technologically advanced environments where we have an expectation to access information very quickly and with minimum fuss. Therefore, as an Association it is essential that we follow this ethos; so, next up later in 2020 we will be completely redeveloping our website.
Our main goal will be to ensure that our members, students and partners can work with us in the most convenient, responsive and straightforward manner possible. We will achieve this by making it easier for all of our stakeholders to navigate to tailored services and relevant offerings on a platform which will support our vision for growth in the coming years. ●
