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Watchdog reports many deficiencies in anti-money laundering supervision

The Office for Professional Body Anti-Money Laundering Supervision, or OPBAS for short, issued its first report on money laundering supervisors in the legal and accountancy sectors at the start of March 2019, reports Julia Penny.

"JuliaPenny"
Julia Penny

May 2019

The report, in the main, only identifies areas of shortcoming, but unfortunately there appear to be many of these in a sector with 22 different professional body supervisors (PBSs) including ICAEW, ACCA, and AAT.

While the messages in the report are aimed squarely at the supervisors themselves, it would be naïve to assume that the points will not have an impact on the supervised. Firms of accountants will do well to understand the key issues of concern and ensure that their current anti-money laundering (AML) procedures fully comply with the law and regulations.

If they do not, it may be much more likely in the future that disciplinary action and sanctions will be applied to any shortcomings found and that the supervisors will be more likely to find such shortcomings.

To give you a feel as to the sort of things that might change, it is worth having a look at the key findings of the report. Note that the findings were made by comparing what OPBAS found in its visits to supervisors with its Sourcebook (the book of rules that apply to the PBSs). These rules can be summarised as follows and they derive from the money laundering regulations:

  1. Governance
  2. A risk-based approach
  3. Supervision
  4. Intelligence and information sharing
  5. Information and guidance for members
  6. Staff training and competence
  7. Enforcement
  8. Record keeping and quality assurance

The OPBAS report does not identify which issues apply to which PBSs. In most cases ICAEW will already have robust procedures to meet the Sourcebook requirements. However, the task of OPBAS is to raise standards and therefore it is likely that there will be at least some changes arising from the implementation of recommendations given.

So, what should firms do? If you haven’t recently carried out an assessment of your internal AML procedures, then now would be a good time to look at this. You might also think about gathering statistics on your client base for high risk types, to help identify where efforts need to be focused. That way, even if there is any stepping up of regulatory activity, you will be confident that all is well. 

Julia Penny FCA is London ICAEW Council Member and Technical Director at SWAT UK @JSPenny

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