The UK government will set up a new regulator to shut down legal loopholes used by criminals and terrorists to launder money in the UK.
Called the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), the watchdog will launch next year.
It will enforce updated money laundering rules and coordinate with other bodies and supervisors to tighten up defences. Industries at risk of being targeted by money launderers, such as the law or accountancy, have 25 (INC HMRC, the FCA and the Gambling Commission) different professional bodies. The aim is for OPBAS to iron out the inconsistencies and gaps between the myriad different guidelines that govern anti-money laundering (AML) efforts and other measures tackling financial crime.
OPBAS will sit within the Financial Conduct Authority, which levied its biggest ever fine for breaches of anti-money laundering rules ever in January. As seen in January 2017 Deutsche Bank had to pay £163 million to the FCA earlier this year for allowing “unidentified customers to transfer approximately $10 billion, of unknown origin, from Russia to offshore bank accounts in a manner that is highly suggestive of financial crime.”
WHY
The Treasury is concerned that the plethora of guidelines has opened loopholes that are being exploited by criminals, a problem it hopes to tackle with OPBAS. Ministers have proposed that the new watchdog will have the power to fine supervisors if the new money laundering regulations are breached.
The new watchdog will also seek to simplify the anti-money laundering rules that apply to different industries.
Simon Kirby, Economic Secretary to the Treasury, said the new regulations and watchdog;
- “will bring the UK’s anti-money laundering regime into line with the latest international standards, and ensure consistently high standards of supervision across all sectors, sending a strong message that money laundering and terrorist financing should not and will not be tolerated.”
- “Having several organisations supervising the same sectors and issuing guidance can lead to inconsistencies which criminals may look to exploit,” the Treasury said in an emailed statement. “Research shows that serious and organised crime costs the UK at least £24 billion every year.”
- “a strong message that money laundering and terrorist financing should not and will not be tolerated.”
Business Minister Lord Prior said:
“We are committed to making the system work better for the majority of law-abiding British businesses.”
“The evidence submitted from a wide range of businesses, trade bodies, NGOs and other organisations has been invaluable in developing our approach to removing unnecessary burdens while stepping up the fight against money laundering,” he said.
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