The new inquiry will include two strands focusing on anti-money laundering (AML) systems and the sanctions regime, including the FinCEN papers – the leaked files containing more than 2,500 documents which revealed the role of global banks in industrial-scale money laundering – and the work of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS).
The second strand focuses on consumers, including emerging trends as a result of Covid-19 and Authorised Push Payment Fraud – also known as bank transfer scams – which occur when consumers are tricked into transferring money from their own bank account to one belonging to a scammer.
AAT said it has statutory AML obligations as a professional supervisory body, and gave evidence to the Committee’s previous Economic Crime inquiry in 2018 and will also be responding to this one.
AAT added it is “wholeheartedly committed” to tackling money laundering and economic crime and has made “considerable investment” in doing so.
Since the creation of OPBAS, the body said it has continued to work collaboratively with supervisors across the regulated sector to ensure “consistent AML data collection processes and risk assessment criteria”.
However, the AAT said it “remains concerned” that approximately a third of the accountancy and tax advice sector is unregulated and believes that this unregulated sector poses a “greater money laundering and economic crime risk”.
It said this is “partly evidenced” by the fact that regulated accountants and tax advisers submitted just 1% of Suspicious Activity Reports (SARS) in 2018-19.
It advised this could be solved by requiring anyone giving paid for tax and accountancy advice to be a member of a relevant professional body, adding this would mean they would have to be “qualified, undertake continuing professional development (CPD), hold appropriate insurance and be subject to professional bodies robust disciplinary processes”.
When giving evidence to the Treasury Select Committee’s Economic Crime inquiry in 2018, AAT recommended that the effectiveness of OPBAS be independently reviewed in 2020, AAT notes this has not yet happened but continues to believe it should.
Adam Harper, director of strategy and professional standards, AAT, said: “AAT strongly supports the UK’s drive to combat money laundering and terrorist financing and, whilst OPBAS is now more established and its operational dynamics as an overarching regulator for professional supervisory bodies appear to be working well, there were issues when OPBAS was initially established.
“The main pitfalls from AAT’s perspective included the lack of clarity around its objectives and how its creation was therefore going to deliver improvements. That’s one of the reasons why we still believe an independent inquiry into the effectiveness of OPBAS would be a good idea.”