OPBAS Report Review 2023-2024

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has released its 2023-2024 report, shedding light on significant concerns about the effectiveness of Anti-Money Laundering (AML) supervision within the legal and accountancy sectors.

The report highlights the need for stronger, more consistent supervision to mitigate the risk of money laundering and financial crime. Despite compliance with the Money Laundering Regulations (MLRs) by most Professional Body Supervisors (PBSs), effectiveness is varied, with none achieving full success in all assessed areas.

A key issue noted in the report is the inconsistent application of a risk-based approach (RBA) by PBSs. Many struggle to identify and mitigate risks, particularly in categorising clients. 56% of supervised populations are classified as low-risk, with the legal sector showing 87% of members as low-risk. This raises serious questions about the accuracy and validity of these risk profiles. Moreover, some PBSs have failed to consider high-risk factors, such as Trust and Company Service Providers (TCSPs), and rely on unvalidated self-declarations for categorisation, which weakens their approach.

Supervisory practices themselves are under scrutiny. OPBAS has observed deficiencies in methodology, with a lack of consistency in implementing desk-based reviews and on-site inspections. Some PBSs outsource their AML inspections, but the oversight of these contractors is insufficient. As a result, PBSs are often unable to demonstrate how insights from outsourced inspections inform their risk-based approach. Furthermore, enforcement actions remain a weak area. There has been a decline in fines and suspensions despite increased findings of non-compliance, suggesting that enforcement is not being effectively utilised as a deterrent.

Inconsistent information sharing among PBSs is another issue, hindering progress in tackling financial crime. Despite engagement in forums like the Anti-Money Laundering Supervisors Forum (AMLSF), the reluctance to use information-sharing gateways under Regulation 52 of the MLRs has been noted, particularly concerning live investigations. The report also highlights sub-sector-specific issues, including weak supervision in conveyancing, bookkeepers, and advocates.

OPBAS has identified a need for more effective collaboration between PBSs, law enforcement, and other stakeholders. Key priorities for improvement include facilitating better information sharing, strengthening the AML supervisory regime, and enhancing the application of enforcement actions. By addressing these weaknesses and inconsistencies, OPBAS aims to ensure more effective AML supervision in the UK, helping to reduce the risk of money laundering and protect the global reputation of the UK economy.

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