HM Treasury adds uncertainty on AML reform
HM Treasury’s response to questions posed by the Association of Accounting Technicians (AAT) regarding proposed reforms to anti-money laundering (AML) and counter-terrorism financing (CTF) supervision reveals a lack of risk assessment and planning, the professional body has warned.
The AAT had asked the Treasury whether it would evaluate the potential risks of each reform model under consideration and publish those assessments. In response, the Treasury stated that consultation responses have allowed them to “understand the full range of possible risks” but did not confirm that formal risk assessments have been conducted.
“It seems the Government hasn’t as yet carried out any of its own risk assessment and is relying on the responses it has received to make a decision,” said Adam Harper, AAT’s Director of Professional Standards and Policy.
The AAT raised concerns that three of the four proposed models could increase money laundering activity or cause the current supervision system to collapse. The Treasury’s consultation identified increased effectiveness, improved coordination, and feasibility as criteria to judge the models but did not consider the risk of enabling further economic crime.
“When we announce which policy we will be pursuing, this will be accompanied with analysis of the policy options against our criteria. This will include analysis of how much the models could improve supervisory effectiveness and how feasible they are.” – HM Treasury
The Treasury also declined to provide a timeline for announcing the outcome of the consultation which closed in September 2023. “Not confirming whether the original timeframe will be met or if an option has been selected adds uncertainty on this critical issue,” Mr. Harper said.
The AAT has warned that consolidating supervision into a single body, as proposed under some models, is unrealistic and risks losing specialist knowledge built up within professional bodies like the AAT. The accountancy body recommends enhancing the current regime which sees multiple supervisors overseen by the Office for Professional Body Anti-Money Laundering Supervision.
The National Crime Agency estimates £36-90 billion is laundered annually in the UK. Accountants play a key role in detecting illicit funds and comply with strict AML regulations overseen by specialist supervisors.
