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Changes to UK supervision rules ‘risk encouraging money-laundering’

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Most of the UK federal government’s strategies to upgrade the supervision of anti-money laundering rules would certainly be counter-productive and harmful to the battle versus unclean cash, accounting bodies have actually alerted.

In a letter to Lords Treasury priest Baroness Joanna Penn, a team standing for 13 accountancy bodies claimed most of the federal government’s recommended versions for changing counter-terrorism funding and AML oversight would certainly damage the UK’s fight versus monetary criminal offense.

It claimed 3 of the 4 versions recommended by the Treasury “carry with them significant risks which at best could see money laundering grow and at worst see the whole supervisory regime collapse”.

The federal government introduced an appointment in June on recommended reforms to the method terrorist funding and cash laundering rules are policed.

Under the existing routine, 22 specialist bodies that manage the book-keeping and lawful fields are accountable for guaranteeing that companies follow AML rules and take enforcement activity if laws are breached.

The federal government advanced 4 versions to shakeup the system, 3 of which recommended a substantial loan consolidation of supervision right into a solitary public body or a handful of specialist bodies.

Accounting bodies have actually created to Lords Treasury priest Baroness Joanna Penn © HM Treasury

The various other design, which the accountancy bodies sustain, would just cause small reforms, such as offering the existing Office for Professional Body Anti-Money Laundering Supervision (OPBAS) boosted powers, yet would certainly not transform the number or kind of managers.

OPBAS, an arm of the Financial Conduct Authority, was produced in 2017 and supervises the AML job of the 22 specialist bodies in the lawful and book-keeping fields.

The appointment, which enclosed September, revealed no choice in between the versions.

It comes as preachers and regulatory authorities tip up initiatives to secure down on cash laundering complying with objection that the UK has actually done inadequate to implement harder safeguards versus unclean cash, gaining the City the tag the London “laundromat”.

The letter to Penn, sent out last month by the Accountancy AML Supervisors Group (AASG), claimed it would certainly be an “enormous administrative task” to make sure cash laundering supervision was kept while a brand-new manager was established.

It included that a “one-size-fits-all approach” would certainly cause an absence of experience, claiming: “The reason there are multiple [professional body supervisors] is because of the sheer scale and variety of supervision that is 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.”

AASG counts the Institute of Chartered Accountants of England and Wales, the specialist body for legal accounting professionals, as one of its participants.

A Treasury representative claimed: “Money laundering and terrorist financing pose significant threats and 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 which will deliver effective supervision over the long term.”





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