It has come to light that Anti-money laundering (AML) rules are not being met by the statutory and accountancy industries, according to a key UK watchdog. After evaluating the 25 Professional Body Supervisors (PBSs) in charge of monitoring the compliance of AML in various sectors, the Financial Conduct Authority (FCA) concluded that none of them fully complied with the requirements.
The FCA’s Office for Professional Body Anti-Money Laundering Supervision (OPBAS) discovered shortcomings in how certain PBSs have implemented AML regulations. A notable concern brought to light was the decrease in the quantity and worth of penalties imposed on companies that violate AML regulations. Fines in the legal field decreased to 33 in 2022–2023 from 38 in 2021–2022. Fines in the accounting industry decreased even more dramatically, from 278 to 178 over the same period.
Industry associations must step up in the quest to fight money laundering and do so more consistently, according to Andrea Bowe, Director of the FCA's Specialist Directorate. In a speech at the International Anti-Financial Crime Summit 2024 in London, Bowe admitted that while some advancement has been made, huge gaps persist.
Bowe stated that although they have stepped in to address shortcomings where they found them, they are still not seeing the consistent, meaningful improvements that they envisioned. Going forward, she said, the FCA will prioritise making sure industry associations apply AML regulations more successfully.
OPBAS also noted that certain PBSs were using technologies inefficiently. Issues regarding conflicts of interest were raised when it was discovered that one company was using an AML platform connected to its top executives. OPBAS pointed out that the setup hadn't been sufficiently tackled in the PBS's internal protocols, even though no misconduct was discovered. The company has decided to modify its AML software as a result.
The results of the FCA's investigation demonstrate the necessity of more supervision and intervention to guarantee that AML compliance is maintained in the accounting and law industries.
