Treasury ponders different anti-money laundering systems

HM Treasury has published a consultation on reform of the anti-money laundering supervisory system, giving four options.

Currently the supervisory system is made up of three statutory supervisors - the Financial Conduct Authority, the Gambling Commission and HMRC, plus no fewer than 22 professional body supervisors who supervise the legal and accountancy sectors. 

These supervisors ensure agencies, other firms and individuals comply with the Money Laundering Regulations and they take enforcement actions if the regulations are breached, and ensure only fit and competent individuals hold management roles in regulated businesses.

However in a new consultation - closing on September 30 - the Treasury is putting forward four options for improvement. This follows some international criticism suggesting the current UK system leaves the country vulnerable to money laundering activities.

The four proposals are:

1. OPBAS+ - the powers of the Office for Professional Body Anti-Money Laundering Supervision would be strengthened, with the ambition of driving further improvements in the effectiveness of professional body supervision. The 22 professional bodies would continue to supervise legal and accountancy sector firms for AML/CTF purposes. There would be no change to the remit of the existing statutory supervisors including HMRC.

2. PBS Consolidation - have either two or six of the current 22 PBSs retain responsibility for AML supervision. Under two PBSs, there would be one PBS in the legal sector and one PBS in the accountancy sector with responsibility for AML supervision. Both of these organisations would have a UK-wide remit. However, they could have specialist divisions to account for differences in regime in Northern Ireland and Scotland as necessary. Under the proposals for six PBSs, there would be one PBS with responsibility for AML/CTF supervision for each of the accountancy and legal sectors in each of three jurisdictions: England and Wales, Scotland and Northern Ireland.

3. Single Professional Services Supervisor - in the legal and accountancy sectors, all professional body supervisors would no longer be AML supervisors. One organisation (existing or new) would take responsibility for the AML supervision of all legal and accountancy sector firms. In addition to legal and accountancy sector firms, this organisation could potentially supervise Estate Agency Businesses and Letting Agency Businesses. Either HMRC could continue to supervise the remaining sectors it currently does, or these could also transfer to the Single Professional Services Supervisor.

4. Single Anti Money Laundering Supervisor- All AML supervision would be done by one body, including the work currently done by the Financial Conduct Authority, the Gambling Commission, and HMRC, and the PBSs. There would be no other AML supervisors. OPBAS would be wound up.

A statement from Propertymark’s head of policy and campaigns - Timothy Douglas - says: “Propertymark has long argued for the consolidation of supervision, whilst promoting the role of professional bodies as supervisors because they understand the sectors they work in and can gather information about developing risks. 

“To this end, the Office for Professional Body Anti-Money Laundering Supervision could play a greater role in facilitating and reporting on the exchange of information between supervisors within and across different sectors.

“However, fundamental to any effective supervision regime is enforcement and reporting to act as a greater deterrent against money laundering and criminal activity. We will be responding to this consultation to ensure that any reforms are adequate, work for our members and reduce economic crime in the property sector.”