The Treasury is to open a new front in the fight against money laundering by creating a watchdog that will tackle potential weaknesses in the supervision of lawyers and other professionals.

Housed at City regulator the Financial Conduct Authority, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will complement updated draft AML regulations, published yesterday. These aim to bring the UK’s AML and counter financing for terrorism regime into line with the latest international standards.

Some 25 organisations supervise sectors at risk of being used to facilitate money laundering – 22 of which are professional bodies in the legal and accountancy sectors. This can generate ‘inconsistencies which criminals may look to exploit’, said the Treasury.

OPBAS will set out how professional body AML supervisors should comply with their obligations under the new regulations, with the power to penalise any breaches. It will be funded by through a new levy on these supervisors.

Law Society president Robert Bourns said: ’While we support, in principle, measures aimed at ensuring more consistent and effective supervision, we are disappointed that the burden of funding the new Office for Professional Body AML Supervision will fall upon the private sector and, ultimately, consumers.’

The Society is however pleased by the Treasury’s rejection of a plea from the SRA during the consultation for full separation from Chancery Lane.

Bourns added: ‘We are pleased the government’s response has recognised our view that there is no evidence to suggest professional body decisions about anti-money laundering supervision have been unduly influenced by their dual role as advocates for their members.’

An SRA spokesperson said: ’Law firms are an attractive target for money launderers, and helping to make sure solicitors do not get involved – unwittingly or otherwise – is a longstanding been a priority of ours. For example we undertook a thematic review of law firms anti money laundering procedures last year.

’We liaise with key organisations on what is a shared concern, and look forward to working with the Treasury on its updated guidance.’