Anti-money laundering supervisor “should practise what it preaches”

Money laundering:
Regulators set to face duty to co-operate with OPBAS

The body that oversees legal regulators’ anti-money laundering (AML) efforts needs to show the same level of transparency that it is demanding of them, the Bar Council has said.

The body representing barristers also accused the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) of a lack of communication, after it published its first year assessment of regulators’ performance without warning them advance.

OPBAS oversees – and is paid for by – 25 legal and accountancy regulatory bodies, known as ‘professional body supervisors’.

The legal regulators it supervises are those for solicitors and barristers in England and Wales, Scotland and Northern Ireland, as well as CILEx Regulation, the Council for Licensed Conveyancers and the Faculty Office of the Archbishop of Canterbury, which regulates notaries.

The recent Treasury consultation on transposing the Fifth Money Laundering Directive proposed introducing a requirement, along with “appropriate sanctions”, for professional body supervisors to deal with OPBAS in an “open and cooperative way, and to disclose to OPBAS anything relating to the professional body supervisor of which OPBAS would reasonably expect notice”.

In its response to the consultation, the Bar Council said it did not object to this “in principle”.

But it continued: “However, we point out to HM Treasury the disappointment that has been expressed by many other supervisors, with which we sympathise, as to the lack of transparency and communication in relation to some issues from OPBAS since its formation.

“Any such requirement to cooperate and share information transparently should, therefore, also apply to OPBAS regarding its relationship with professional body supervisors.

“Specifically, the Bar Council agrees with calls for greater clarity on OPBAS’s business plan and related performance, its measures of supervision including supervisory visits and what these are proposed to entail and the allocation of OPBAS’s resources.”

The Bar Council said it was also vital that professional body supervisors were notified in advance of any “public commentary” by OPBAS that related to them, including in official reports, and were granted a reasonable right to reply.

In March, OPBAS published the broad findings of its first-year assessments of the 25 supervisors, which caught them all by surprise.

OPBAS found that nearly half of legal regulators did not undertake enough supervision of AML efforts – due to a lack of resources, structure or focus at senior levels – but the main legal regulators were more successful at ensuring AML rules were observed than their accountancy counterparts.

The Bar Council, Law Society and Chartered Institute of Legal Executives were also visited by OPBAS in its first year, as legally they have regulatory responsibility for AML, but they delegate it to their regulatory arms.

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