Dirty Money Finds Home in U.K. as Regulators Fail, FCA Says

LONDON (Capital Markets in Africa) – U.K. organizations supervising accountants are too worried about pleasing their membership to live up to their duty to crack down on money laundering, setting back attempts to rid the country of billions of pounds of dirty money, according to a new report.

Some of the U.K.’s 22 groups overseeing accountants and lawyers did no anti-money laundering supervision whatsoever, the Office for Professional Body Anti-money Laundering Supervision said in its first major report since its inception a year ago. The Financial Conduct Authority, which oversees the agency, released the report Tuesday.

Twenty of the 22 groups had yet to start, or were still in the middle of, collecting the kind of information required to assess their exposure to risks, the FCA said. A quarter undertook “no form of AML supervision,” often because of a lack of staff competence and training. And 86 percent didn’t issue penalties for breaches, rather giving “support and guidance,” the report said. Conflicts of interest also featured highly in the list of issues the groups needed to tackle.

The professional “focus more on representing their members rather than robustly supervising standards,” Alison Barker, the FCA’s director of specialist supervision, said Tuesday in a speech in London. “Partly because they don’t believe — or don’t want to believe — that there is any money laundering in their sector, partly because they believe that their memberships will walk if they come under scrutiny.”

Over the last few years, the U.K. has introduced measures to combat its financial center being a hub of white-collar crime, but, according to the National Crime Agency, hundreds of billions of pounds of dirty money still finds its way into the country. The anti-money laundering office was established last year as a way of forcing professional services, which are often found to be enablers of financial crimes, to become more accountable.

“We need to see robust action to prevent professionals being used to launder money,” Barker said. “Let’s not give oxygen to organized crime.”

Source: Bloomberg Business News