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The AAT has warned that the government must proceed with great caution before potentially tearing up anti-money laundering (AML) processes in an attempt to reform regulation.
This comes as the government has launched a two-month consultation today, offering input on four proposals before they will decide on a route of reform.
Three of these options would see the removal of OPBAS – the Office for Professional Body Anti-Money Laundering Supervision – which is currently made up of supervisors from different professional bodies, overseeing and regulating their members in collaboration with one another.
One proposal would see OPBAS replaced by just a single private-sector professional body, while other possible scenarios would result in a significant transformation of the current landscape through a new regulator covering accounting and law, or alternatively a new regulator overseeing every profession.
The remaining scenario, in which OPBAS could remain in place, would see them given more powers to regulate supervisors tackling money-laundering crimes.
Unlike the other three proposals, AAT argues that OPBAS+ is “the most practical” reform in terms of time and minimising risk during transition.
According to Treasury data from 2020, serious and organised crime, much of which is made up of economic crime, costs the UK economy approximately £37bn per year. AAT has outlined how this figure could rise if high-risk transitional options are opted for, as the crossover period alone could see a drop in compliance and supervision.
Adam Harper, director of professional standards and policy at AAT, said: “In this economic climate, the government cannot afford to take high risks with anti-money laundering, yet most of the new outlined proposals could see a dramatic rise in economic crime.
“Consolidating supervision to just one private sector body could see a catastrophic collapse in supervision and dramatically elevate the risk of regulatory failure. Options for a cumbersome and potentially enormous regulator also carry with them significant transition risks and will take years to implement effectively.”
He added: “OPBAS+ is not only the most sensible solution but the most effective – enabling OPBAS to remove supervisors will improve compliance and address many of the government’s prior concerns.”
AAT said it strongly recommends OPBAS+ out of the four options, in order to maintain order and give the regulation process the chance to evolve and improve based on learnings so far.
