Faculty protests at burden of money laundering compliance proposals
"Deep dismay" has been expressed by the Faculty of Advocates at the prospect of a new, "financially onerous” anti-money laundering regime.
Faculty made the comments in its response to UK Government plans for an Office for Professional Body Anti-Money Laundering Supervision (OPBAS), to be established within the Financial Conduct Authority.
OPBAS will oversee the adequacy of the anti-money laundering supervisory arrangements of 22 professional bodies, including Faculty. A draft “sourcebook for professional body supervisors” was the subject of the consultation.
In its response, Faculty says that advocates do not handle clients’ money, nor open or manage bank, savings or securities accounts. Further, a very large proportion of members work in areas of law which do not come under anti-money laundering regulations. However, members are still obliged under the Faculty’s code of conduct to acquaint themselves with legislation covering proceeds of crime and money laundering, and to take appropriate steps to comply with them.
“The obvious striking, and disappointing, feature of the guidance proposals is the failure to distinguish between individual professional body supervisors and to treat each as largely identical", the response states. "Such an approach is oversimplistic and does not begin to reflect the unique and very low risk position of the Faculty as an independent referral bar."
It continues: “There has never been any suggestion that the Faculty or its advocates are failing in their duties or that they require tighter control. The Faculty has been, and will continue to be, very willing to engage with HM Treasury and the Legal Sector Affinity Group in developing best practices."
The proposed costs of OPBAS, on the other hand, are "staggering and manifestly disproportionate", at a total of £2m a year, the opaper continues. “We note that it is anticipated that there will be an additional average cost to professional body supervisors of £39,800 per year of administration costs" – or £875,600 for all 22 supervisors. "We do not consider it in any way acceptable that a small body such as Faculty, with a very low risk profile, should be subjected to such a burdensome and financially onerous regime.”