Regulation 21(1)(b) of the Money Laundering Regulations 2017 requires a practice, where appropriate to its size and nature, to screen relevant employees both before they are appointed and during their employment. Screening means assessing two things: the person’s skills, knowledge and expertise to do the job effectively, and their conduct and integrity. A relevant employee is anyone whose work affects compliance or could help spot or prevent money laundering, which in most practices means all client facing staff.

What does regulation 21 require?

Regulation 21(1)(b) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) requires a relevant person, where appropriate with regard to the size and nature of its business, to carry out screening of relevant employees it appoints, both before the appointment is made and during the course of the appointment. Regulation 21(2)(a) defines screening as an assessment of:

  • the skills, knowledge and expertise of the individual to carry out their functions effectively; and
  • the conduct and integrity of the individual.

Regulation 21(6) disapplies the requirement for an individual who neither employs nor acts in association with anyone else; see AML for sole practitioners. Under regulation 21(10), the firm decides what is appropriate by reference to its own risk assessment, and may take account of approved guidance. Screening sits alongside the other internal controls in regulation 21, the compliance officer and the independent audit function, and must be written into the firm’s policies, controls and procedures.

Who counts as a relevant employee?

Under regulation 21(2)(b), a relevant employee is one whose work is relevant to the firm’s compliance with any requirement of the Regulations, or is otherwise capable of contributing to identifying or mitigating the risks of money laundering, terrorist financing and proliferation financing, or preventing or detecting them.

ICAEW’s helpsheet for smaller practices says this would include client service staff but possibly not a receptionist, depending on the scope of the role. In a typical practice the following are likely to be relevant employees:

  • anyone who onboards clients or carries out due diligence;
  • accounts, tax, payroll and bookkeeping staff who see client transactions;
  • staff who handle client money or make payments;
  • the MLRO, compliance officer and partners.

Subcontractors and agents are not employees, but they are covered by the training duty in regulation 24, and ICAEW says the skills, knowledge, expertise, conduct and integrity of agents such as subcontractors should also be assessed. HMRC’s guidance on compliance officers (AMLG11000) likewise lists agent screening among the compliance officer’s duties.

What does a conduct and integrity check involve?

The Regulations do not prescribe the checks. HMRC’s guidance for the businesses it supervises (AMLG1900) says that, as a minimum, it expects the policies on screening to include:

  • Home Office checks that relevant employees who are not UK citizens have the right to work in the UK;
  • a basic DBS check before appointment to establish whether the person has unspent convictions for relevant offences in the UK;
  • checks for unspent convictions for relevant offences overseas;
  • a requirement for relevant employees to tell the firm immediately if they are convicted of a relevant offence;
  • making sure employees doing relevant work have the skills and training to comply.

HMRC also expects the policies to set out what the firm will do if a check produces an adverse result. Relevant offences are listed in Schedule 3 to MLR 2017 and, according to HMRC’s guidance on approval checks (AMLG1600), include any offence with an element of dishonesty, such as theft or fraud, whether committed in the UK or abroad.

A basic DBS certificate, available for jobs in England and Wales, shows only unspent convictions and costs £20, according to GOV.UK. Scotland and Northern Ireland have their own equivalents. Firms supervised by a professional body should check their supervisor’s expectations, which may differ in detail from HMRC’s. ICAS suggests that firms may also screen staff against politically exposed person, sanctions and adverse media lists, and use annual declarations to cover conduct and integrity.

How do you assess skills, knowledge and expertise?

This half of screening is easy to overlook. ICAS quotes the CCAB anti money laundering guidance for the accountancy sector as saying that firms must consider the skills, knowledge, expertise, conduct and integrity of all relevant employees before and during their appointment, and should have a mechanism for evidencing money laundering knowledge, for example a test with recorded results. ICAEW’s helpsheet says this may be built into recruitment, appraisal and training procedures, and that regular recorded ethics training with test questions may help assess integrity.

In practice that means checking qualifications and experience at recruitment, setting a short anti money laundering test after induction training, and reviewing results and any compliance lapses at appraisal. Training itself is a separate duty under regulation 24; see AML training requirements for practice staff.

What does screening during employment look like?

Regulation 21(1)(b) applies during the appointment as well as before it, so a one off check at recruitment is not enough. ICAS describes a policy of screening relevant staff for conduct and integrity at least annually. Common ongoing measures are:

  • an annual declaration that the person has no unspent convictions for relevant offences, has not been made bankrupt and knows of no conflicts;
  • a standing duty to report any conviction or charge immediately;
  • fresh checks when someone moves into a more sensitive role, such as client money or MLRO duties;
  • appraisal evidence of anti money laundering knowledge and of how the person handled any compliance issues.

How does this differ from approval of owners and managers?

Regulation 26 is a separate regime. No one may be a beneficial owner, officer or manager (often called a BOOM) of an accountancy firm, or act as a sole practitioner, unless approved by the firm’s supervisory authority. The supervisor must grant approval unless the person has been convicted of a relevant offence. An approved person convicted of a relevant offence must tell the supervisor within 30 days, and so must the firm once it becomes aware. Acting without approval is a criminal offence carrying up to two years’ imprisonment on indictment.

ICAEW requires BOOMs, including practitioners, to obtain a DBS certificate as part of approval. HMRC’s guidance says firms should take reasonable care that officers and managers are approved, including at a minimum a basic DBS check and a signed declaration about overseas convictions as part of recruitment, promotion or restructuring. Screening under regulation 21 covers the wider staff group who are not BOOMs.

Are there data protection limits?

Yes. Criminal record information is criminal offence data under the UK GDPR. The ICO explains that an organisation without official authority can process it only if it meets a condition in Schedule 1 to the Data Protection Act 2018, must also have an Article 6 lawful basis, will often need an appropriate policy document, and must consider a data protection impact assessment. The ICO also says organisations cannot keep a comprehensive register of criminal convictions unless under official authority. Firms should therefore record the outcome of a check rather than keep copies of certificates longer than needed, and explain the checks in their staff privacy notice.

What might a policy look like, and where do firms go wrong?

Illustration only. A six person practice writes a one page screening procedure. Before appointment, every relevant employee provides right to work evidence, a basic DBS certificate, references and proof of qualifications, and signs a declaration about overseas convictions. After induction they complete a recorded anti money laundering test. Each January the MLRO collects annual declarations and test results, and any adverse result is escalated to the senior partner, who decides on next steps and records the reasons. The receptionist, who has no access to client records, is assessed as not a relevant employee and the reason is noted.

Common mistakes include:

  • screening only at recruitment and never again;
  • checking criminal records but not testing knowledge, which is half the statutory definition;
  • forgetting subcontractors and freelance bookkeepers;
  • having no written decision on who is and is not a relevant employee;
  • keeping DBS certificates indefinitely on personnel files;
  • confusing BOOM approval by the supervisor with the firm’s own screening of staff.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.