A new anti-money laundering (AML) watchdog which the Law Society has warned will impose ‘unnecessary costs’ on the profession will be formally created next month.
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has been set up by the Financial Conduct Authority. Its aim is to oversee the adequacy of supervisory arrangements at 22 professional bodies - including the Law Society and Solicitors Regulation Authority.
Each body will have a nominated senior manager or member of the board of directors who will have obligations for carrying out due diligence.
Each body will also be charged a fee to recover the office’s running costs.
A consultation paper published in July estimated the fee to be £2 million, shared by all 22 bodies. A further cost will be added on top to account for ‘additional tasks’. The FCA estimates this to be £39,800 per organisation. The FCA said it would publish feedback and final rules in February or March.
After the scheme was proposed, Law Society president Joe Egan said the case for OPBAS had ‘not yet been made effectively’.
‘The costs associated with OPBAS might make it uneconomic for smaller AML supervisors to continue in their role,’ Egan said. He added that no new infrastructure should be put in place before the Financial Action Task Force has carried out its review of the UK’s AML regime next year.
But Stephen Barclay, economic Secretary to the Treasury, said yesterday: ‘Our partnership with the private sector is at the heart of this reform, and OPBAS will help our supervisors tighten the UK’s defences against dirty money whilst minimising unnecessary burdens on legitimate business. This is the latest step in the government’s reforms to the UK’s financial system to make it a hostile environment for illicit finance.’