New government watchdog to tackle money laundering

UK Gov
By Eleanor O'Neill, CA Today

23 March 2017

The UK government has announced plans to set up a new oversight regulator for Anti Money Laundering Supervision.

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will exist within the Financial Conduct Authority (FCA) and complements the updated Money Laundering Regulations published earlier this month.

Currently, the law and accountancy sectors are supervised by 25 organisations, including professional bodies like ICAS. These organisations are acknowledged to be at the forefront of innovating against and identifying emerging risks in their respective fields.

However, the Government perceives the possibility of inconsistency in regulatory practice across multiple overseers particularly in the areas of risk and monitoring and has raised concerns over standards of supervision.

The aim of this new body is to try to ensure a degree of consistency among supervisors in the two sectors.  There is also a proposal to reduce the amount of actionable guidance bodies are required to adhere to. It will also be responsible for working with professional bodies as obligations are updated to reflect the new Money Laundering Regulations.

Business Minister Lord Prior said: "The Cutting Red Tape review asked firms to identify needless, confusing or unclear bureaucracy that could constrain legitimate business and distract from the fight against money laundering and terrorist financing.

The new Office for Professional Body AML Supervision will bring the UK’s anti-money laundering regime into line with the latest international standard.

"We are committed to making the system work better for the majority of law-abiding British businesses. The evidence submitted from a wide range of businesses, trade bodies, NGOs and other organisations has been invaluable in developing our approach to removing unnecessary burdens while stepping up the fight against money laundering."

Simon Kirby, Economic Secretary to the Treasury, commented: "The new Money Laundering Regulations and the new Office for Professional Body AML Supervision will bring the UK’s anti-money laundering regime into line with the latest international standards, and ensure consistently high standards of supervision across all sectors, sending a strong message that money laundering and terrorist financing should not and will not be tolerated."

The government has called for an official outline of the new body's powers and mandate and legislation to secure funding, raised from a new fee on professional body AML supervisors, is expected by the end of the year.

OPBAS is expected to be up and running by January 2018 and is to be funded by a new levy on professional bodies.  ICAS and the other bodies have already been in discussion with HM Treasury and will be engaging with the FCA in the coming months.  No figure for the costs of setting up and running OPBAS have been given but it is expected that they will not be insubstantial.  Ultimately though those costs may have to be borne by the supervised populations.

ICAS will be commenting further on both OPBAS and the new Money Laundering Regulations over the coming months but meantime we would urge members to consider and respond to the consultation document on OPBAS.

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