One thing we know for sure about the government is that they are paranoid about money laundering and how to combat it. The problem is detecting it in the first place. And so they have progressively put the onus on professionals to report any suspicion they have that money laundering may be taking place – and making it a criminal offence if
they don’t.
A fully operational OPBAS will be overseen by the Financial Conduct Authority (FCA) by the start of 2018.
The professional bodies will have to fund this new supervisory anti-money laundering regime assembled by the Treasury to ensure that consistent standards are enforced across
all sectors. But an unwelcome consequence of this could see the extra charge filter down and affect practitioners' subscriptions and clients’ fees. Professional bodies are not for-profit organisations, there is no way they can absorb this so they will have to pass it on.
Number of professional
bodies ‘risks inconsistencies’
The Treasury explained that the aim of the new OPBAS is to strengthen and coordinate the current inconsistent approach to MLR compliance.
“The number of professional body supervisors in some sectors risks inconsistencies of approach. And data is not yet shared between supervisors freely or frequently enough, which exposes some supervised sectors to risk where there are overlaps in supervision,” wrote the Treasury.
It's hard to see the justification for the office, however, because the accountancy and legal sectors already attend quarterly AML supervisory forums led by the Treasury.
The Treasury expects OPBAS will plug the £24bn they estimate is lost to serious and organised crime each year through
having several organisations supervising the same sector.
The new watchdog will also have the power to recommend that the Treasury removes a professional body as an AML supervisor, and will hold them to account for their performance including the potential to impose penalties where this considered 'poor'.
Simon Kirby, the economic secretary to the Treasury, said that the new money laundering regulations and OPBAS 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”.
David Winch, AccountingWEB’s money laundering reporting expert, said: “[The government’s response] may be more attractive (or less unattractive) to practitioners than an alternative approach such as putting all supervision in the hands of
HMRC or some other government body.”
The government launched a call for information in conjunction with this announcement, looking for clarity on the mandate and powers. Respondents have until 26 April to respond to the consultation.
Noel Guilford