Your essential four step guide to risk management

Sign for a High Risk Area Construction Site

The Importance of having an integrated risk and business strategy

Does your risk strategy and business strategy sit in two separate folders? When drafting your risk strategy, was it aligned to the business strategy and written with your organisational goals at the forefront? Or, as most companies do, is your risk strategy little more than a casually updated excel sheet?

Without an integrated risk and business strategy, the business will struggle to properly identify the long-term challenges that will affect your business, and thus will miss out on crucial indicators and controls and fail to see risk as a strategic priority.
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Government rushes through new Money Laundering Regulations 2017

Big Ben and Houses of Parliament

Parliamentary procedure broken in order to meet today’s EU deadline

The government confirmed at the last minute the new EU Fourth Anti-Money Laundering Directive (4MLD) will come into force today (Monday) in order to meet the European deadline of transposing the 4th Directive into national legislation by 26 June 2017.

Due to the general election, the government has been forced to rush through the new rules, and will break parliamentary convention in order to do so.

The Money Laundering Regulations 2017 is a negative statutory instrument. These automatically become law without debate unless there is an objection from either House of Parliament. By convention negative statutory instruments should not come into effect until a minimum of 21 days after they are laid out. However, on Friday the government confirmed they would be breaking these rules in order to ensure that the EU deadline for transposing the Fourth Directive into national law is met.
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Is your law firm doing enough to tackle modern slavery?

In June, the Law Society published its first slavery and human trafficking statement under the requirements of Section 54 of the Modern Slavery Act. This emphasises its call for the legal industry to be at the forefront of the fight against modern slavery. Overall, 87 law firms have published their own modern slavery statements – a good proportion of the medium to large firms that are legally required to.

Of course, while many law firms are publishing their own statements, a key part of a law firm’s work on modern slavery is to advise their clients on fulfilling their legal responsibilities. The Modern Slavery Act doesn’t require much more than the publication of a slavery and human trafficking statement, but how to prepare it, and best practice in doing so, is up to the individual relationship between lawyer and client.

How has the Law Society tackled this problem?

The Law Society set out their statement in three key parts, offering a good guide for those firms still grappling with setting out their priorities for addressing modern slavery in their supply chains.
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The SRA handbook – what will be changing?

Long road ahead

The SRA has just published their decision and response to the ‘looking to the future’ consultation on changes to the SRA handbook. Over 11,000 people engaged in the process, reflecting opinion from a broad range of people and organisations including solicitors, law firms the public and representative bodies.

Solicitors can not only expect a shorter, simpler code, but two codes of conduct; one for individuals and one for firms.

This will allow for one of the most significant changes since, and partly because of, the Legal Services Act 2007. The changes, expected sometime in 2018, will allow solicitors to offer non-reserved legal services outside of regulated firms.
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What to expect after the election – post-election analysis

Polling station sign
The result of the 2017 general election has resulted in a hung parliament

What business needs to prepare for in a hung parliament

As the clock struck ten on election night, it was all over. Theresa May’s gamble had failed to pay out. The majority was lost. An unexpected swing to Labour across key and unexpected constituencies took place, offset by a strong swing against the SNP. A surge in young voters turning out and a complete collapse of the UKIP vote meant that the 42% won by the Conservatives and the 40% won by Labour no longer resulted in a landslide, but a hung parliament.

Before the election, VinciWorks published an outline of what to expect after the election from a Conservative or Labour government. Neither of those results has come to pass, so here’s what business could expect, and should prepare for, in this new reality.

A hard Brexit won’t happen

There simply isn’t a majority in Parliament for the hard Brexit that Mrs May was proposing. Cutting off British access to the customs union and single market as the Conservative party wanted looks likely to be set adrift. The Tory’s partners in Parliament, the Northern Irish Democratic Unionist Party, while themselves cheerleaders of Brexit, want a softer version and a frictionless border with the Republic of Ireland, and thus the EU.  
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What’s the latest on the Fourth Money Laundering Directive?

The Fourth Money Laundering Directive updates and expands anti-money laundering laws across the European Union. Unlike GDPR, which will automatically come into force, updating the AML regime requires each national parliament to transpose the regulations into local law.

In the UK, this means updating the Money Laundering Regulations 2007. The government completed their consultation in April and published a draft of the Money Laundering Regulations 2017 to be laid before parliament. The EU stated that the Fourth Directive must be in force in every country by 26 June 2017.

However, the general election called by Theresa May has thrown that timetable into disarray. The new parliament won’t meet until sometime between 14 to 21 June, leaving barely days before the deadline.

Will the UK miss the deadline?

Most likely, although perhaps not by much. The draft statutory instrument has been published and is ready to be considered by parliament. Given the long lead-in time of the Fourth Directive, the consultations and lack of particularly controversial measures, even a change of government is not likely to disrupt the process too much.

Broadly, we know what the new requirements of the Fourth Directive are, and how the UK plans to implement them. While the official change won’t take place until the 2017 Regulations is law, there is every reason to think this will happen sooner rather than later.
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The Fourth AML Directive: What do accountants need to know?

Money Laundering

One of the first orders of business for the new government, whatever its colour, is to pass the Money Laundering Regulations 2017. According to EU rules, the Fourth Money Laundering Directive must be transposed into UK law by 26 June. While the consultation phase has been completed, there is still room for a new government to make some movement on the new regulations if it wishes. The Directive still leaves some rules open to national interpretation, so while the core of the changes are set, a new government will have just weeks following the election to decide what to do.

However, for the main themes of the legislation we do know what will be changing. Accountants need to be aware of some of the key changes coming in the Fourth Directive.

UBO is changing

The ultimate beneficial owner of a corporate client will need to be determined and due diligence checks performed. A UBO is anyone who owns or controls 25% or greater percentage in a corporation. If you don’t know who the UBO of a client is, you must take “all reasonable steps” to determine this. If no beneficial owners can be identified, then the details of senior managers must be recorded.
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What to expect after the election

Number 10 Downing Street

What business needs to prepare for no matter who walks into Number 10

Theresa May called a general election expecting, we all assume, that she would have an easy ride back into 10 Downing Street. While she still enjoys a commanding lead over the Labour party, this has narrowed in recent weeks. The Tories are still odds-on favourite to win, although elections can often throw up surprises.

Now the manifestos of all the major parties have been published, we can glean some idea of what will be changing in the compliance landscape no matter who the Prime Minister will be after the election. Of course, should the election result in a hung parliament, manifesto pledges can be traded and bartered away, and promises made before an election can often be forgotten in the glow of victory.

Nevertheless, it’s always a good idea to consider the potential risks of an election outcome, and start to prepare accordingly.
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More cyber security attacks expected – how to protect yourself

Example of ransomware

Ransomware attacks computers in 150 countries

On Friday hundreds of thousands of computers were held to digital ransom as a cyber security attack spread around the world. The cyber weapon, allegedly stolen from the US National Security Agency (NSA), even locked NHS staff out of their systems, forcing hundreds of critical operations to be cancelled and staff having to turn away sick patients at the door. The attack spread quickly and installed malware onto over 200,000 computers, demanding payments of up to $600 in return for the data. With cyber security experts expecting more attacks imminently, this latest attack shows everyone needs to understand cyber security and make it a top priority.

The cyber attack that began with spam emails

The attack began with targeted phishing emails appearing to contain job offers, security warnings and invoices, as well as people’s own personal files. Once the files were unassumingly downloaded, the ransomware was able to spread across large networks. This makes understanding how to protect against cyber attacks more important than ever, with the opening of phishing emails often having the ability to affect computers across a whole network.
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