The details were confirmed in the a document outlining responses received to a Treasury consultation earlier this year on anti-money laundering (AML) supervision.

The Office for Professional Body AML Supervision (OPBAS) is intended to help ensure professional body AML supervisors comply with their obligations in the Money Laundering Regulations, and that their actions are consistent and comprehensive.

Overall, the Treasury says that while several respondents agreed the draft regulations delivered on the government’s intent, others sought clarity or stronger safeguards in some areas.

Several PBSs highlighted concerns that OPBAS could impose disproportionate burdens, including through excessive requests for information, issuing multiple directions, and by requiring (potentially expensive) consultants be appointed to carry out skilled persons reports.

The Treasury says the new body will adopt a ‘proportionate approach’ and  has clarified that OPBAS may only request a report by a skilled person where it is reasonably considered to be required to support OPBAS in its oversight of PBSs.

Several legal professional body AML supervisors noted that OPBAS will not have powers to request information from regulated businesses, and therefore not require information about a lawyer’s client’s full name and address. The government has therefore removed this provision. To provide clarity, the government has also defined the term ‘excluded material’ for the purposes of safeguards on the provision of information.

As several respondents noted, Parts 2 – 4 of the Proceeds of Crime Act 2002 (concerning the confiscation of the proceeds of crime following a successful conviction) and Regulation 88 of the MLRs (whereby individuals intentionally provide false or misleading information in order to undermine the AML regime commit an offence) are not applicable in the context of professional body AML supervisors. The government agrees, and has removed these provisions.

Regarding disclosure and data privacy issues, some respondents suggested drafting changes that would clarify the circumstances in which: OPBAS may helpfully share information; the organisations that might receive information; and, the circumstances in which those organisations might further share information collected by OPBAS. The government has clarified this accordingly.

In addition, to ensure that information collected by OPBAS is used correctly, the government has introduced a criminal offence if an individual (including a member of FCA staff) discloses information inappropriately.

Some respondents suggested that OPBAS be empowered to publicly censure, or recommend the removal of, PBSs that failed to comply with OPBAS’s other instructions, in addition to requests for information or directions. One respondent also proposed that there be a criminal offence where individuals intentionally provide OPBAS with misleading or incorrect information.

The Treasury agrees that professional body AML supervisors, and individuals, should be sanctioned if they fail to comply with a requirement imposed either by OPBAS or the Money Laundering Regulations.

As a result, OPBAS’s powers to publicly censure or recommend the removal of a PBS will apply to all relevant breaches. The government has also clarified that OPBAS may publicly censure or recommend the removal of a PBS, or both, in response to a single contravention.

Respondents also queries aspects of the proposed sanctions and penalties regime.

The Treasury has agreed that if OPBAS has publicly censured the professional body AML supervisors, then it may appeal to the Upper Tribunal.

If it recommends the Treasury remove a professional body AML supervisors as an AML supervisor, then it may approach the Treasury directly.

One professional body AML supervisors suggested that the Treasury review OPBAS two years after implementation, while a trade body respondent indicated the review date should be aligned with the 2017 MLRs so the regime is reviewed as a package.

Consequently, the government will be required to review OPBAS before 26 June 2022, as is the case for the Money Laundering Regulations.

OPBAS will publish its objectives annually, as well as performance against its objectives, its priorities for the coming year and emerging risks, in the FCA’s Annual Report. This report will be supported by information published on OPBAS’s website.

Anti-money laundering supervisory review: response to the consultation

Report by Pat Sweet