NEWS: None of 25 UK legal and accounting industry bodies ‘fully’ meet AML standards, FCA warns

By Paul O’Donoghue, Senior Correspondent

A KEY UK regulator has warned that lawyers and accountants are failing to fully meet money laundering standards.

The UK’s Financial Conduct Authority (FCA) oversees ‘Professional Body Supervisors’ (PBS). These are the bodies which set the standards in their sectors – for example, the Law Society of Scotland.

Of the 25 PBSs assessed, it was found that none were “fully effective in all areas” of anti-money laundering measures.

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS), a division within the FCA, found “weaknesses” in how PBSs use enforcement powers to supervise members.

“For example, the number and value of fines issued declined in the previous year,” OPBAS said.

Andrea Bowe, Director at the Financial Conduct Authority’s Specialist Directorate, said industry groups need to improve their AML standards.

Ms Bowe who is a speaker at ‘International Anti-Financial Criminal Summit 2024’ in London on October 9 next said that through OPBAS, the FCA has intervened to “tackle failings where we have found them”.

The Summit will be officially opened by FATF President Elisa De Anda and will feature regulators, policymakers, industry leaders and law enforcement chiefs. Leading speakers, panellists and includes world leaders such as:

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• Guy Ficco, Chief, Internal Revenue Service - Criminal Investigation (IRS-CI), US
• Tracey McDermott, Group Head, Conduct, Financial Crime & Compliance, Standard Chartered Bank
• Adrian Searle, Head, National Economic Crime Centre, National Crime Agency (NCA)
• Jaap van der Molen, Managing Director, Head Detecting Financial Crime, ABN AMRO Bank

Referring to the findings by the FCA, Andrea Bowe noted: "We are still not seeing the consistent, effective improvement we need.”

Ms Bowe said the regulator will now focus on improving the “consistency and effectiveness” of the various industry groups.

The FCA found that legal groups issued 33 fines to member companies in the 2022 – 2023 financial year. This was down from 38 in 2021 – 2022.

Accountancy groups issued 178 in 2022 – 2023, a significant drop compared to the 278 recorded the year before.

Another example OPBAS gave of PBSs being “less effective” was of one group which used a technology platform for its AML work.

The regulator found that the platform “had links” to senior management at the organization, which was not named.

“While there was no suggestion of wrongdoing, this arrangement was not clearly evidenced in the PBS’s conflicts of interest process,” OPBAS said.

The regulator said that the PBS then agreed to change its AML software.

‘However, we are still not seeing the consistent, effective improvement we need,” she said.

The FCA’s Andrea Bowe is one of the speakers at ‘International Anti-Financial Crime Summit 2024’ – organized by AML Intelligence – on October 9. Have you booked your or your organization's place yet? Details of how to attend are available HERE.

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