UK OPBAS Report Highlights Areas for Improvement in AML Supervision Among Legal and Accountancy Sector

In its fifth report, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has revealed significant gaps in AML supervision of Professional Body Supervisors (PBS). Despite the fact that “they were complying with money laundering regulations,” their results were still not satisfactory.

Although most PBS comply with AML requirements, their oversight still needs improvement, as these are not effective enough.

Role of OPBAS

OPBAS operates under the Financial Conduct Authority’s (FCA) supervision and “oversees 25 PBSs to ensure all organizations in legal and accountancy categories must comply with AML regulations.”

Supervision and Enforcement Gaps

Assessments of PBSs were not upto the mark in any aspect of oversight, as stated by OPBAS Findings. Not even a single one has effective results.

As the report mentioned, PBSs did not execute its operations effectively and did not use “enforcement powers and tools” productively to oversee businesses and individuals for desired results.

Compared to the previous year, they have decreased the number and amount of fines for people who violate AML laws and regulations, and they had severe penalties for financial crimes in contrast to recent years.

“A Decrease in the number and value of fines” indicates the critical gaps in implementing anti-money laundering AML laws and weak efforts for combating financial crimes.

Inconsistent Information Sharing with Regulators

Another concern raised by the report is the “inconsistent sharing of information and intelligence between regulators, PBSs, and law enforcement agencies.”

Specific improvements have been observed but the limited sharing between different regulatory bodies and in a few aspects of money laundering supervision creates difficulty in stopping the illegal flow of illicit funds in the UK.

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Increased Oversight and Guidance

OPBAS has improved its AML compliance by utilizing supervisory tools to tackle its shortcomings in AML supervision.

This includes utilizing its authority to order ‘two PBSs’ to address deficiencies in AML controls and rectify the gaps.

OPBAS has provided advice to assist PBSs in improving their supervision in January 2023.

The guidance outlines the goals and results PBSs have to achieve. PBSs will be reviewed according to the provision of the latest guidance, and the main focus of assessment would be its “supervisory oversight” linked with ares who have weakness.

A weak risk-based approach has been seen in the 2023-2024 assessment cycle of PBSs. This year, weak and less regular assessments have been noted compared to evaluations of the previous year.

A weak Risk assessment approach leads to failure in identifying, evaluating, and managing AML risks.

Statement of Andrea Bowe

FCA has urged combating financial crimes, and OPBAS will improve the efficiency and effectiveness of PBSs for robust AML compliance and rectify the gaps.