What insolvency practitioners need to know about updated anti-money laundering guidance

The Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing Guidance for the Accountancy Sector (AMLGAS) has been updated to reflect legislative changes and provide clearer guidance for the accountancy profession. Although the insolvency-specific guidance in Appendix F hasn't yet been revised, David Menzies CA, Director of Practice, highlights the key changes affecting insolvency work and the areas Insolvency Practitioners (IPs) should review to ensure their anti-money laundering policies, procedures and controls remain up to date.

AMLGAS has been updated to reflect legislative changes and provide clearer guidance for the accountancy sector. Appendix F remains the main insolvency-specific guidance and continues to support decisions on customer due diligence, risk assessment, enhanced due diligence and ongoing monitoring.

However, Appendix F has not been updated to reflect the latest changes. Where it differs from the revised AMLGAS, IPs should follow the AMLGAS position.

We're working with others to consider what updates may be needed to Appendix F. In the meantime, IPs should make sure they understand the revised AMLGAS requirements, terminology and expectations, and apply them when carrying out insolvency work.

What you need to do now 

Review the following areas and make sure your policies, procedures and training reflect the updated AMLGAS.

Monetary thresholds

AMLGAS reflects legislative changes that replace certain euro-denominated monetary thresholds with sterling equivalents.

Review your AML policies, procedures, engagement controls and training materials to ensure they no longer rely on superseded euro thresholds in Appendix F.

In paragraph F.3.15, read the €15,000 threshold as £12,000. In paragraphs F.3.17 and F.7.1, read the €10,000 threshold for high-value dealer cash payments as £10,000.

High-risk jurisdictions

AMLGAS provides updated guidance on jurisdictional risk, including how to treat jurisdictions subject to Calls for Action by the Financial Action Task Force (FATF).

It also explains that other publicly available information should inform the assessment of geographic risk. This includes jurisdictions subject to increased monitoring by FATF and the Accountancy AML Supervisors’ Group Risk Outlook.

Ensure your approach to risk assessment reflects this guidance.

Enhanced due diligence (EDD) and transaction monitoring 

AMLGAS now requires EDD where transactions are “unusually complex or unusually large”. This replaces the previous wording, “complex or unusually large”.

Apply the revised AMLGAS wording when considering EDD requirements. Update your policies, procedures and training to use the new terminology and reflect the current legislative position.

Source of funds

AMLGAS places greater emphasis on source of funds enquiries where transactions appear inconsistent with your knowledge of a business relationship.

For IPs, these questions will usually arise through ongoing monitoring of the insolvency estate, relevant parties or the overall risk profile. Consider whether further enquiries are needed when activity or funding appears inconsistent with what’s known about the case.

Source of funds enquiries may be relevant to third-party contributions to individual voluntary arrangements or trust deeds, litigation funding, significant asset purchases, connected-party transactions and other unusual sources of funding.

AMLGAS also makes clear that ongoing monitoring and source of funds enquiries may extend to past transactions. In an insolvency context, Statement of Insolvency Practice 2 investigations may identify transactions that appear inconsistent with your knowledge of the insolvent estate. Where this occurs, consider whether further source of funds enquiries are needed.

Beneficial ownership and entity directorships 

AMLGAS expands the guidance on identifying and verifying beneficial owners and directors.

Obtain enough evidence to support beneficial ownership determinations, document key judgements and avoid relying solely on public registers where further verification is needed on a risk-sensitive basis.

Identity verification

AMLGAS provides enhanced guidance on evidence of identity and gives greater recognition to electronic and digital verification methods. It sets out a hierarchy for identity evidence and clarifies when reliance can be placed on digital identity verification services.

If you use a digital verification service, check that it appears on the GOV.UK register of services certified against the UK digital identity and attributes trust framework. Confirm this with your provider if necessary, as the customer-facing brand may differ from the certified service shown on the register.

What should IPs do now?

Until Appendix F is updated, check that your AML framework reflects the revised AMLGAS.

This includes reviewing policies and procedures, updating training materials, briefing relevant staff and ensuring that current risk assessment, customer due diligence, enhanced due diligence and ongoing monitoring processes align with the current guidance.

Pay particular attention to source of funds, beneficial ownership, jurisdictional risk, and unusually complex or unusually large transactions.

Looking ahead

We're working with others to determine what updates Appendix F may need, including how it should address the issues mentioned above.

We’ll keep members updated as this work progresses. Until Appendix F is revised, IPs should use it alongside AMLGAS and ensure their approach reflects current risk-based anti-money laundering expectations.