There has recently been commentary in the professional services sector that OPBAS*, which is the oversight regulator of the professional bodies, is concerned with the level of compliance with the Money Laundering Regulation (AML). In particular it has noted that compliance with the 5th Anti-Money Laundering Directive (5MLD) is generally poor. It certainly seems that professional services companies aren’t doing what they should be in regards to this. But is that okay, or is this something we should be taking more seriously?
There is no disguising that this isn’t the most interesting of subjects. Complying with AML and 5MLD could definitely be deemed as boring red tape. Perhaps this is why it is generally perceived that the compliance of it by solicitors, accountants and Insolvency Practitioners (IP) is below the expected standard. Perhaps it has mentally become nothing more than a box ticking exercise.
On the contrary, though, I believe we need to be far more proactive with it. If you’re a Money Laundering Regulation Officer (MLRO), as I am, then it’s your duty to assess this regularly, and at least annually. I’ve just been through this process myself. It took a significant amount of time to check everything, enhance systems and go through the necessary internal training. But it is, I believe, necessary.
There is an interesting quirk which I picked up on as part of my review. If you’re an accountant, are you checking with your clients during the annual review that you have the most up to date company information? Is the shareholding the same, who is the Person of Significant Control (PSC)? Is the information on Companies House accurate? More than just ticking that box, knowing this information is vital, particularly if you are responsible for maintaining the Statutory Record Books. As an IP, if a company enters into an insolvency process, I have to report to Companies House if a PSC register is not adequately maintained.
There is also a concern that Suspicious Activity Reports (SARs) aren’t being submitted by solicitors, accountants and IPs, which only reinforces the notion that system compliance here is poor.
It’s not an exciting task. There’s no reason to pretend otherwise. But if the process isn’t properly followed and the level of scrutiny that is needed isn’t anywhere near met, then it could mean records get quickly out of date and it could mean that the FCA will be left with no choice but to take over the role of monitoring.
As you can probably tell, I think as an industry we need to take this far more seriously. Do other people share this view? I’d be eager to hear your thoughts.
*The Government established OPBAS as part of a wider package of reforms to strengthen the AML supervisory regime in the United Kingdom. The OPBAS Regulations 2018 came into effect on 18 January 2018 and give OPBAS duties and powers to ensure the professional body AML supervisors meet the standards required by the Money Laundering Regulations 2017. OPBAS is housed within the FCA and will facilitate collaboration and information sharing between the professional body AML supervisors, statutory supervisors, and law enforcement agencies. OPBAS aims to improve consistency of professional body AML supervision in the accountancy and legal sectors, but does not directly supervise legal and accountancy firms.