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Accounting bodies have warned that changes in the UK supervision of AML compliance regulations will weaken security systems and the fight against money laundering and terrorist financing.
According to the UK accounting bodies, most revisions in anti-money laundering supervision legislation is affecting the effectiveness of the financial crime prevention system. Most of the UK’s amendments to reforming AML and CFT oversight would weaken combating crime related to financial crimes. A group of 13 accounting bodies sent a letter to the Lord Treasury Minister, Baroness Joanna Penn, stating, “Carry with them significant risks, which at best could see money laundering grow and at worst see the whole supervisory regime collapse.”
Under the current regime, 22 regulatory authorities can monitor the AML compliance procedure and ensure the legal framework of financial institutes and enforcement action against breached companies. However, in June, the government launched a consultation to polish the AML oversight laws and put forward four models to reform the system. Three of these models stated that they would merge all supervision and regulatory bodies into a single body of experts. Nevertheless, accounting bodies support the other model to enhance the power of the Financial Conduct Authority (FCA) department’s Office for Professional Body Anti-Money Laundering Supervision (OPBAS). The accounting bodies added in a letter, “The reason there are multiple [professional body supervisors] is because of the sheer scale and variety of supervision needed. It spans different sectors, professions, and sizes of businesses. This requires the [professional body supervisors] to have a detailed level of knowledge and expertise to supervise firms to a high standard and understand the unique characteristics of the profession they oversee.”
According to the Treasury minister, these reforms enhance the UK’s AML measures to secure the integrity of the global economy sector. The minister also criticises the regulators’ efforts to clamp down on money laundering and terrorist financing, claiming the UK has done too little to bolster security against the launderers. A Treasury spokesperson stated, “Money laundering and terrorist financing pose significant threats. Our review of the UK’s money laundering regulations last year found that — despite improvements in recent years — weaknesses remain in the UK’s supervision regime, meaning that reform is necessary. We are considering responses to the consultation carefully and will select a model early next year to deliver effective supervision over the long term.”