HMG TIGHTENING THE SCREWS – A NEW ANTI-MONEY LAUNDERING BODY

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25 Apr HMG TIGHTENING THE SCREWS – A NEW ANTI-MONEY LAUNDERING BODY

OPBAS – what is it and what will it do?

The UK government has announced plans to create OPBAS – the Office for Professional Body Anti-Money Laundering Supervision – a new watchdog that will tackle potential weaknesses in the money laundering supervisory system that criminals and terrorists may be trying to exploit.   OPBAS will be housed in the FCA and and will apparently operate within the FCA’s existing governance arrangements.

It is hoped that OPBAS will improve the overall standards of supervision and ensure supervisors and law enforcement work together more effectively

This announcement was made contemporaneously with the publication of the updated Money Laundering Regulations.  This version sets out new standards of robust supervision requiring all supervisors take into account common factors when developing risk assessments and taking decisions on disciplinary action

The government has clarified that it is determined to tackle the issue of those sectors most at risk of being used to facilitate money laundering and terrorist financing.   The government has taken to heart research indicating that serious and organised crime costs the UK at least £24 billion each year.  Thus, it is hoped that the creation of OPBAS will ensure consistent high standards of regulation, supervision and enforcement across the regime.  That determination however is coupled with the desire to impose the minimum burden possible upon legitimate business.  It remains to be seen if this is an aspiration which is easily met.

 
The Developing Regime – Tailored Guidance and PEPs
 
The government’s intention is eventually to approve one piece of AML guidance for each sector and to reduce and simplify the amount of guidance businesses need to follow. It is intended that the new “tailored guidance” will complement the Joint Money Laundering Steering Group Guidance and the Financial Conduct Authority’s (FCA) crime guide.

The updated Money Laundering Regulations will also apparently provide clarity for firms on how they should treat Politically Exposed Persons (PEPs). The government has set out a series of steps to address wide-ranging concerns about the disproportionate and unjustified withdrawal or potential restriction of financial services from domestic PEPs, their families and close associates. Additionally the FCA will publish specific guidance on the treatment of high- and low-risk PEPs.

Government ministers have set out, contemporaneously with this announcement, their desire that the crackdown upon money laundering and terrorist financing should be maintained whilst focussing attention on those sectors most significantly at risk and reducing the burden on businesses.  At a time when professionals and business are supervised by complex myriad layers of regulatory bodies, only time will tell whether these laudable aims are achieved.

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