STEP supports HM Treasury’s proposal of increased OPBAS powers under AML/CFT rules

This was the first of the UK government’s proposed new models for its AML/CTF supervisory regime and the one it considers most ‘immediately feasible’. In its response to the consultation, STEP noted the extended OPBAS powers (OPBAS+) model would be the best option in terms of supervisory effectiveness.

‘It is important that the option chosen by HM Treasury is seen as one that will continue to uphold effective AML supervision’, STEP’s consultation response states. ‘The option must be feasible as significant resources would be dedicated into implementing the supervisory model selected. Given

that taxpayers’ and professional’s money would be used in implementing this policy, any change in AML supervision should continue to deliver effective supervision while not proving an overly costly use of public funds.’

STEP added that granting additional powers through OPBAS+, such as fining and assessment powers, would improve the effectiveness of the OPBAS regime as well as the relationship between OPBAS and professional body supervisors (PBSs). It did, however, caution that ‘the current issues of consensus between PBSs and HMRC must also be addressed to ensure better system coordination under the OPBAS system.’

We did not support the government’s fourth proposed model of a single anti-money laundering supervisor (SAS) for all AML/CTF supervision in the UK. We expressed concerns that such a model would require significant policy expertise to uphold high AML supervision standards and that there is no guarantee that such expertise would be transferred from the current regime over to the new one. ‘This would further create the risk that a new SAS would lack the detailed understanding of each profession currently contained within the PBSs’, STEP added.

The Law Society of Scotland has also responded to the consultation, similarly rejecting the proposal of a single AML supervisor for the whole of the UK. It expressed concerns that a ‘one-size-fits-all’ approach would be a ‘regressive step’ in combatting economic crime and risk damaging progress that had already been achieved.

Instead, it echoes STEP’s view that the OPBAS+ model could be effective and says it ‘does not oppose reform consolidating [AML] supervision on a devolved basis.’

Sources

• STEP (consultation response, PDF)
• UK government (consultation)
• Law Society of Scotland
• Law Society of Scotland (consultation response, PDF)
• STEP UK News 6 July 2023: UK government proposes potential models for AML reform