ACCA (the Association of Chartered Certified Accountants) has responded to HM Treasury’s current review of anti-money laundering (AML) supervision, which has called for a new Office for Professional Body AML Supervision (OPBAS) to oversee the AML supervision exercised by the professional bodies in the legal and accountancy sectors. 

Ian Waters, Head of Standards at ACCA says,

‘The tone of the HM Treasury consultation is somewhat different to that of the draft sourcebook published by the FCA in its guidance consultation. Therefore, the future role of OPBAS is unclear, and the anticipated costs of running OPBAS (estimated by the FCA at around £2m per annum) appear excessive.

Although vague, the proposals would appear to lack any regard to proportionality. Professional bodies will be required to meet the running costs of OPBAS, as well as the additional costs of their interactions with OPBAS. These costs must ultimately be borne by supervised firms, which are also likely to suffer additional compliance costs.’

Ian Waters continues,

‘It is a particular concern that OPBAS oversight is restricted to the professional bodies, and so HMRC, as the default AML supervisor for accountants, will not be subject to oversight.

As the costs of AML supervision are passed on to members of professional body supervisors (PBSs), a number of professional accountants (especially sole practitioners) may start to question the increasing cost of being supervised for AML by a professional body.

While ACCA members recognise the benefits of being regarded as members of a trusted profession, inevitably, some accountants may choose to give up their professional body membership, and so fall to be supervised by HMRC (or, worse still, seek to avoid supervision). The inevitable outcome is that fewer practising accountants will be subject to regulation, or even to suitably robust AML supervision.

This would be seriously detrimental to the public interest in two fundamental respects: apart from the lack of regulation in practice (and the client protection that goes with it, such as professional indemnity insurance and compliance with a code of ethics), there is a risk that those accountants that are supervised by HMRC will be mistakenly thought to be regulated, thus adding to the confusion that already exists when a member of the public requires the services of an accountant.’

Ian Waters adds,

‘A further concern regarding costs is that, once the FCA has determined how their costs are to be allocated, a PBS must have an option to cease to be recognised as an AML supervisor under the Money Laundering Regulations. The mechanism for this is not clear from the latest consultation. However, the implication of such a withdrawal from PBS status must be that the costs of OPBAS would have to be distributed between a smaller number of PBSs. Thus, the problems and risks are magnified.

We would like to see HM Treasury engage much more closely with the concerns of the professional bodies on these issues.’ 

The full ACCA submission can be read here: http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2017/august/Anti-money_laundering_supervisory_review_HM_Treasury.html

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About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 198,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centres and 7,291 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com