AAT responds to new Economic Crime inquiry

AAT (Association of Accounting Technicians) has responded to the launch today (23 October) of a new Parliamentary inquiry into combatting economic crime.

The new inquiry will include two strands focusing on anti-money laundering (AML) systems and the sanctions regime, including the FinCEN papers – the leaked files containing more than 2,500 documents which revealed the role of global banks in industrial-scale money laundering – and the work of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS). The second strand focuses on consumers, including emerging trends as a result of Covid-19 and Authorised Push Payment Fraud – also known as bank transfer scams – which occur when consumers are tricked into transferring money from their own bank account to one belonging to a scammer.

AAT has statutory AML obligations as a professional supervisory body, gave evidence to the Committee’s previous Economic Crime inquiry in 2018 and will be responding to this one.

• AAT is wholeheartedly committed to tackling money laundering and economic crime and has made considerable investment in doing so
• Since the creation of OPBAS, AAT has continued to work collaboratively with supervisors across the regulated sector to ensure consistent AML data collection processes and risk assessment criteria. AAT produces a raft of guidance and template documents to support best practice in AML compliance by all AAT-supervised firms. The AAT governance framework enacted in 2019 ensures that AML issues are monitored at a senior, independent level
• AAT remains concerned that approximately a third of the accountancy and tax advice sector is unregulated and believes that this unregulated sector poses a greater money laundering and economic crime risk. This is partly evidenced by the fact that regulated accountants and tax advisers submitted just 1% of Suspicious Activity Reports (SARS) in 2018-19. This could be solved by requiring anyone giving paid for tax and accountancy advice to be a member of a relevant professional body. This would mean they would have to be qualified, undertake continuing professional development (CPD), hold appropriate insurance and be subject to professional bodies robust disciplinary processes
• When giving evidence to the Treasury Select Committee’s Economic Crime inquiry in 2018, AAT recommended that the effectiveness of OPBAS be independently reviewed in 2020, AAT notes this has not yet happened but continues to believe it should.

Adam Harper, director of strategy and professional standards, AAT, said:  “AAT strongly supports the UK’s drive to combat money laundering and terrorist financing and, whilst OPBAS is now more established and its operational dynamics as an overarching regulator for professional supervisory bodies appear to be working well, there were issues when OPBAS was initially established. The main pitfalls from AAT’s perspective included the lack of clarity around its objectives and how its creation was therefore going to deliver improvements. That’s one of the reasons why we still believe an independent inquiry into the effectiveness of OPBAS would be a good idea.”

Commenting on the launch of the inquiry, Rt Hon. Mel Stride MP, chair of the treasury committee, said: “The previous committee made a series of recommendations on the UK’s effort to combat money laundering and what can be done to prevent consumers from being victims of economic crime.

“The current committee will now examine what progress supervisors, law enforcement and the government has made in these areas.

“It’s important that the relevant bodies are held to account and scrutinised effectively to ensure that the UK is a clean place to do business and that consumers are protected from economic crime.”

See AAT’s website for more information about the organisation’s role in combatting anti-money laundering, including AML supervision, criminal record checks, encouraging best practice and its support for the government’s ‘Flag It Up’ AML campaign.