Action is being taken too slowly against firms who break money-laundering regulations, and too many are failing to take a proactive approach to sharing intelligence with regulators and law enforcement agencies.

That’s one of the conclusions in the fourth annual report from the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), the section of the FCA that oversees the work of 25 Professional Body Supervisors (PBSs).

“Professional bodies are continuing to improve their oversight, but they need to be more ambitious and accelerate their efforts so that we can tackle money laundering more effectively,” said Emad Aladhal, Director of Specialists at the FCA.

“Over the next year, we will be looking to make greater use of all our regulatory tools, including enforcement action where appropriate, to make sure PBSs continue to improve and fulfil their obligations.”

Not consistent

The report acknowledges progress since the inception of OPBAS in 2018 and says that it is “important not to lose sight of this”, but it says, “we need to acknowledge that the improvements in effectiveness are not consistent in pace or scale across all PBSs”.

For the report, OPBAs carried out supervisory assessments of nine PBSs, covering nearly 80% of beneficial owners, officers or managers subject to the money-laundering regulations. Data from annual returns to the Treasury and Regulation 46A reports were analyzed.

Key findings were:

• A fully effective, risk-based approach prioritising AML supervisory and enforcement has not been consistently implemented. OPBAS found inconsistencies in the assessment of risk factors, with insufficient methods for identifying emerging risk.
• Supervisory activities are weak. Most PBSs were found to be only partially successful in taking timely and adequate corrective actions. Too many firms were unclear on what type of action to take.
• None of the PBSs assessed had fully effective intelligence and information sharing arrangements.
• While progress has been made in taking enforcement action, the overall level of effectiveness of enforcement frameworks needs to rise.
• The implementation of sanctions against Russian entities following the invasion of Ukraine has been a notable area of success for PBSs.

The full report, which includes detail of next steps, is available on the FCA website.