Work to be done on supervision of AML regime

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has released its latest report on progress made in tackling money laundering by regulators over the past year.

While this year’s report acknowledges that professional body supervisors (PBSs) within the accountancy and legal sectors have improved, it highlights differing levels of achievement and “significant weaknesses in effectiveness in meeting the MLRs.”

OPBAS is housed within the FCA and its key objectives are to reduce the harm of money laundering and terrorist financing by:

  • Ensuring a robust and consistently high standard of supervision by the professional body AML supervisors (PBSs) overseeing the legal and accountancy sectors, and
  • Facilitating collaboration and information and intelligence sharing between PBSs, statutory supervisors and law enforcement agencies.

The report noted an increase in the number of fines issued. It also highlights a 47% decrease in the number of supervisory reviews undertaken by regulators in the year April 19-April 20 from the previous year, but identifies a 38% increase in post review activity; either formal or informal action required on the part of the firm.

The majority of PBSs were effective in providing information and guidance for members to help them understand their high-level obligations; and the quality and accuracy of information and guidance had improved since the 2020 report.

Sarah Pritchard, the FCA’s Executive Director of Markets, said:

“Ensuring the effectiveness of financial crime controls and reducing financial crime risk is a key priority for the FCA. As this report finds, Professional Body Supervisors of the accountancy and legal sectors have made welcome improvements in compliance with the Money Laundering Regulations in the three years since OPBAS has been in operation, and we need to see continued improvements in the effectiveness of their supervision.

OPBAS will continue to collaborate and partner with law enforcement, government and wider stakeholders, domestically and internationally, to raise standards across the regulated sectors.”

This round of supervisory assessments also considered the PBSs’ response to Covid-19, and there are good examples of PBSs amending their risk-based approach to factor in pandemic-specific challenges, such as providing updated guidance on alternative methods of customer due diligence verification.

Ensuring the effectiveness of financial crime controls and effectively reducing financial crime risk is a key priority in this year’s FCA Business Plan and OPBAS expects PBSs to focus their supervisory efforts to have the greatest impact on the prevention of money laundering.

Read the report in full here: https://www.fca.org.uk/publication/opbas/supervisory-assessments-progress-themes-2020-21.pdf

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