UK Regulatory Body Urges Law and Accountancy Groups to Strengthen AML Analysis

A prominent regulatory body in the UK has urged law and accountancy trade groups to deepen their analysis of anti-money laundering (AML) failures, emphasizing the critical need for enhanced transparency and scrutiny within these sectors. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS), a division housed within the Financial Conduct Authority (FCA), has been diligently overseeing the activities of 25 professional body supervisors (PBSs) in the legal and accountancy domains since its establishment in 2018. Its primary objective is to ensure that these entities uphold consistent and robust standards for AML supervision.

The PBSs are mandated to produce annual reports detailing their AML and counter-terrorist financing (CTF) supervisory activities, which are rigorously evaluated by OPBAS. In its assessment of the 2022/23 reporting period, OPBAS noted a positive trend, with over half of the reports demonstrating improved clarity and quality compared to previous evaluations. Notably, several reports were deemed to meet all suggested criteria effectively, marking a significant step forward in addressing the multifaceted challenges posed by money laundering and terrorist financing.

According to OPBAS, some PBSs have proactively identified weaknesses within their supervised populations and taken concrete steps to address them, including the issuance of guidance and specialized training programs. However, while acknowledging these efforts, OPBAS stressed the imperative for further improvement from the law and accountancy groups, particularly in providing more detailed analysis of AML issues.

OPBAS emphasized the importance of reports containing in-depth analysis of the root causes behind compliance failures and deficiencies within supervised populations, coupled with reflective commentary on opportunities to enhance supervisory approaches. Additionally, the regulatory body highlighted the necessity for an increased focus on reports outlining the actions taken by PBSs in response to concerns identified in the quality of Suspicious Activity Reports (SARs) submitted by supervised businesses.

The regulatory expectations in these areas are meticulously outlined in OPBAS's 'Sourcebook', serving as a comprehensive guide for bolstering the efficacy and integrity of AML supervisory practices. OPBAS urged PBSs to embrace these guidelines in their future reports to augment the quality and value of their submissions. Furthermore, OPBAS pledged to provide detailed feedback to each PBS, facilitating targeted improvements ahead of the next reporting cycle spanning from April 2023 to April 2024.

As the deadline for the submission of the next set of PBS reports looms on November 1, 2024, OPBAS remains steadfast in its commitment to fortifying the UK's defenses against money laundering. This ongoing collaboration between regulatory authorities and industry stakeholders underscores the collective effort to safeguard the integrity of the financial system and mitigate the risks posed by illicit financial activities.

By fLEXI tEAM