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ICAEW warns against government AML proposals

Author: ICAEW Insights

Published: 02 Oct 2023

ICAEW has responded to a government consultation on plans to create a single anti-money laundering (AML) regulator.

ICAEW has warned that proposals to create a single AML regulator could create disruption that could harm the UK financial system, in its response to HM Treasury’s AML supervisory consultation, submitted 28 September 2023. 

ICAEW’s preferred option is the proposed OPBAS+ model, which would enhance the powers of Office for Professional Body Anti-Money Laundering Supervision (OPBAS) and increase the effectiveness of professional body supervision (PBS).

This would preserve and build on the significant investment already made in OPBAS, maintain the UK’s alignment with AML work in Europe, and reduce the risk of uncertainty posed by greater upheaval caused by the other options proposed. OPBAS+ could be implemented swiftly, building on the current system and requiring only minor changes to legislation.

The other proposals included consolidation of professional bodies, a single supervisor for professional services and a single regulator. Each brings a number of risks that could allow criminals to operate and do damage to the economy, ICAEW said. It added that the other options would risk gaps in intelligence from the disruption in already-existing intelligence-sharing relationships.

There would also be a reduction in awareness and competency of AML risk as professional bodies would lose their incentive for creating educational material and running initiatives to boost knowledge, ICAEW said.

“We take our role as an AML supervisor very seriously, but acknowledge there are areas where the system could benefit from reform,” Michelle Giddings, ICAEW’s Head of AML and Operations, said. “It’s vital that professional bodies like ICAEW continue to play a role in AML supervision. We gather a wealth of intelligence through our relationships with the firms we supervise, and removing professional bodies from AML supervision risks losing this valuable intelligence.”

Additionally, ICAEW raised fears that a new regulator could be understaffed if employees at the existing bodies did not move across. In this case it would lack the expertise to operate effectively, which would weaken AML supervision.

“In our view the OPBAS+ model will deliver the most feasible and effective way to improve supervision by building on what works,” said Giddings. “We are concerned that the other options proposed would weaken AML regulation, and risk leaving the door open for criminals to do business in the UK and cause wider damage to the economy.”

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