HM Treasury Report Shows Shifting Supervisory Efforts, Few AML Penalties
05 Aug 2019

The UK’s HM Treasury recently (and belatedly) published its Anti-Money Laundering and Counterterrorist Financing Supervision Report for the year ended 31 March 2018. With publication of the findings coming some fifteen months after the end of the review period, regulators and supervisors have no excuses for failing to address the highlighted concerns.

The report provides an overview of the the activities of the UK’s three statutory regulators—the Financial Conduct Authority, HM Revenue & Customs and the Gambling Commission—and the 22 professional body supervisors (PBSs) that police their members for anti-money laundering (AML) purposes. It also makes for interesting reading, particularly against the background of the extremely favourable FATF Mutual Evaluation Report (MER) issued in December 2018.

Nevertheless, the MER noted that UK regulators, with the exception of the Gambling Commission, had significant weaknesses in their approach to risk-based supervision, as did all the professional body supervisors. Their shortcomings included a lack of dissuasive sanctioning across all sectors, but particularly within the accountancy and legal sectors. HM Treasury’s overview shows that the UK’s AML oversight is beginning to address such shortcomings, though supervisory efforts appear to remain uneven.

OPBAS finds supervisory gaps

Among the biggest changes noted by HM Treasury was the creation of a new agency to oversee other UK supervisors. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) was launched in February 2018 with the aim of supervising the 22 PBSs and ensuring that firms under their remit are subject to a consistent level of oversight. Little more than a year later, the agency published a report outlining the scope of challenges for professional body supervisors.

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