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Most of the UK authorities’s plans to overtake the supervision of anti-money laundering guidelines can be counter-productive and damaging to the combat towards soiled cash, accounting our bodies have warned.
In a letter to Lords Treasury minister Baroness Joanna Penn, a gaggle representing 13 accounting our bodies mentioned the vast majority of the federal government’s proposed fashions for reforming counter-terrorism financing and AML oversight would weaken the UK’s battle towards monetary crime.
It mentioned three of the 4 fashions proposed by the Treasury “carry with them significant risks which at best could see money laundering grow and at worst see the whole supervisory regime collapse”.
The authorities launched a session in June on proposed reforms to the best way terrorist financing and cash laundering guidelines are policed.
Under the present regime, 22 skilled our bodies that supervise the accountancy and authorized sectors are answerable for making certain that companies adjust to AML guidelines and take enforcement motion if rules are breached.
The authorities put ahead 4 fashions to shake-up the system, three of which proposed a big consolidation of supervision right into a single public physique or a handful {of professional} our bodies.
The different mannequin, which the accounting our bodies assist, would solely end in minor reforms, resembling giving the present Office for Professional Body Anti-Money Laundering Supervision (OPBAS) enhanced powers, however wouldn’t change the quantity or sort of supervisors.
OPBAS, an arm of the Financial Conduct Authority, was created in 2017 and oversees the AML work of the 22 skilled our bodies within the authorized and accountancy sectors.
The session, which closed in September, expressed no desire between the fashions.
It comes as ministers and regulators step up efforts to clamp down on cash laundering following criticism that the UK has carried out too little to implement more durable safeguards towards soiled cash, incomes the City the moniker the London “laundromat”.
The letter to Penn, despatched final month by the Accountancy AML Supervisors Group (AASG), mentioned it could be an “enormous administrative task” to make sure cash laundering supervision was maintained whereas a brand new supervisor was arrange.
It added {that a} “one-size-fits-all approach” would end in a lack of awareness, saying: “The reason there are multiple [professional body supervisors] is because of the sheer scale and variety of supervision that is needed.
“It spans different sectors, professions, and sizes of businesses. This requires the [professional body supervisors] to have a detailed level of knowledge and expertise to supervise firms to a high standard and understand the unique characteristics of the profession they oversee.”
AASG counts the Institute of Chartered Accountants of England and Wales, the skilled physique for chartered accountants, as certainly one of its members.
A Treasury spokesperson mentioned: “Money laundering and terrorist financing pose significant threats and our review of the UK’s money laundering regulations last year found that — despite improvements in recent years — weaknesses remain in the UK’s supervision regime, meaning that reform is necessary.
“We are considering responses to the consultation carefully and will select a model early next year which will deliver effective supervision over the long term.”
