What is OPBAS? (AML)

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a department within the Financial Conduct Authority (FCA). Established in January 2018 under FCA Policy Statement PS18/5, OPBAS was created to strengthen the United Kingdom's anti-money laundering (AML) supervisory framework. Its primary purpose is to ensure that the professional body supervisors (PBSs) responsible for overseeing the legal and accountancy sectors maintain consistently high standards when enforcing AML requirements on their members.

Money laundering poses a serious threat to the integrity of the UK financial system. The government recognised that accountancy and law firms were particularly vulnerable to exploitation by criminals seeking to launder the proceeds of crime, and that the professional bodies supervising those firms were not always applying sufficiently robust oversight. OPBAS was created to address these weaknesses and bring greater consistency to AML supervision across the regulated sectors.

The Legal Framework: Key UK AML Regulations

OPBAS operates within a well-established legal framework designed to combat money laundering and terrorist financing. Understanding these regulations is essential for any professional services firm subject to AML obligations.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

The Money Laundering Regulations 2017 (MLR 2017) are the cornerstone of the UK's AML regime. They transpose the EU's Fourth and Fifth Anti-Money Laundering Directives into domestic law and impose detailed requirements on firms operating in the regulated sector, including:

Carrying out risk assessments to identify and assess money laundering and terrorist financing risks
Implementing customer due diligence (CDD) measures, including verifying the identity of clients and beneficial owners
Applying enhanced due diligence for higher-risk business relationships, such as those involving politically exposed persons (PEPs)
Maintaining adequate record-keeping systems for a minimum of five years
Appointing a nominated officer responsible for receiving and assessing suspicious activity reports (SARs)
Establishing internal controls, policies, and procedures proportionate to the firm's size and risk profile
Providing ongoing AML training to relevant employees

The Proceeds of Crime Act 2002

The Proceeds of Crime Act 2002 (POCA) establishes the criminal offences associated with money laundering. Under POCA, it is a criminal offence to conceal, arrange, acquire, use, or possess criminal property. The Act also creates a duty to report suspected money laundering to the National Crime Agency (NCA) through the submission of Suspicious Activity Reports. Failure to report can itself constitute a criminal offence, carrying penalties of up to five years' imprisonment.

FATF Recommendations

The Financial Action Task Force (FATF) Recommendations provide the international standards that underpin AML frameworks globally. The UK's regulatory regime, including the MLR 2017 and OPBAS itself, is designed to align with these recommendations. The FATF conducts mutual evaluations of member countries to assess compliance, and its 2018 Mutual Evaluation Report on the UK highlighted weaknesses in the supervision of professional body supervisors, directly supporting the case for OPBAS.

Which Professional Bodies Does OPBAS Oversee?

OPBAS does not supervise individual firms directly. Instead, it oversees the 22 professional body supervisors responsible for AML compliance in the legal and accountancy sectors. These include some of the UK's most prominent professional organisations:

The Law Society of England and Wales and The Law Society of Scotland
The Solicitors Regulation Authority (SRA)
The Institute of Chartered Accountants in England and Wales (ICAEW)
The Association of Chartered Certified Accountants (ACCA)
The Institute of Chartered Accountants of Scotland (ICAS)
The Chartered Institute of Legal Executives (CILEx)
The Council for Licensed Conveyancers (CLC)
The Association of Accounting Technicians (AAT)
The Insolvency Practitioners Association (IPA)

Each of these bodies is responsible for ensuring that its members comply with the Money Laundering Regulations 2017. OPBAS monitors whether these supervisors are fulfilling their responsibilities effectively, consistently and to a sufficiently high standard.

What Do OPBAS Assessments Look For?

OPBAS conducts regular assessments of professional body supervisors against a set of clearly defined criteria. These assessments examine several core areas:

Governance and Independence

OPBAS assesses whether each PBS has appropriate governance arrangements in place. The supervisory function must be sufficiently independent from other functions within the professional body, and it must be allocated adequate resources in terms of staff, funding and expertise.

Risk-Based Approach

An effective risk-based approach is fundamental to AML supervision. OPBAS evaluates whether PBSs have a thorough understanding of the money laundering and terrorist financing risks present within their sector and membership. This requires comprehensive data collection and analysis to identify which firms are most vulnerable.

Supervision and Monitoring

OPBAS reviews whether PBSs are carrying out sufficient supervisory activities, including desk-based reviews, on-site inspections and thematic reviews. Supervisors are expected to focus their resources on the firms that present the highest risk of facilitating money laundering.

Enforcement and Sanctions

Where firms are found to be non-compliant, PBSs must take appropriate enforcement action. OPBAS assesses whether supervisors are willing and able to impose meaningful sanctions, including fines, restrictions on practising, and referrals to law enforcement agencies. A failure to take robust enforcement action is a significant concern for OPBAS.

Information Sharing and Intelligence

Effective AML supervision depends on the sharing of intelligence between supervisors, statutory bodies, and law enforcement. OPBAS promotes and facilitates information sharing between PBSs and organisations such as the NCA, HM Revenue and Customs, and the FCA itself. PBSs are expected to participate actively in intelligence-sharing arrangements and to report suspicious activity promptly.

Staff Competence and Training

OPBAS expects that staff carrying out supervisory functions within PBSs have appropriate qualifications, skills and training. Competent supervision is essential for identifying and responding to AML risks effectively.

Consequences of Failing an OPBAS Assessment

Professional body supervisors that fail to meet OPBAS standards face a range of potential consequences. OPBAS has the power to:

Publicly report on the performance of individual PBSs, identifying specific weaknesses
Direct PBSs to take remedial action within specified timeframes
Recommend that HM Treasury consider removing a professional body's status as an AML supervisor
Escalate concerns to the FCA for further regulatory action

For the firms supervised by those professional bodies, the consequences of inadequate AML compliance are equally severe. Firms can face significant financial penalties, loss of practising certificates, criminal prosecution of individuals, and lasting reputational damage. Directors and senior officers may be held personally liable for compliance failures under both the MLR 2017 and the Proceeds of Crime Act 2002.

AML Obligations for UK Professional Services Firms

If your firm operates in the legal, accountancy, or financial services sectors, you are almost certainly subject to AML obligations under the Money Laundering Regulations 2017. Meeting these obligations requires a comprehensive, documented approach to compliance. At a minimum, firms should have the following in place:

A firm-wide risk assessment identifying the specific money laundering and terrorist financing risks relevant to the firm's clients, services, and geographic exposure
Written AML policies, controls and procedures that are proportionate to the firm's size and risk profile, and that are approved by senior management
Customer due diligence procedures covering identity verification, beneficial ownership checks, and ongoing monitoring of business relationships
A nominated officer (MLRO) responsible for receiving and assessing internal suspicious activity reports and submitting SARs to the NCA
A training programme ensuring that all relevant staff understand their AML responsibilities and can recognise the indicators of suspicious activity
Record-keeping systems that retain CDD records and transaction data for at least five years after the end of the business relationship
Regular independent audits of the firm's AML compliance framework

How AML Policies Demonstrate Compliance

Well-drafted AML policies are the foundation of a firm's compliance programme. When a professional body supervisor conducts an inspection or desk-based review, the first thing it will request is the firm's written AML policies and procedures. These documents serve as evidence that the firm has identified its risks, implemented appropriate controls, and communicated its expectations to staff.

An effective AML policy should clearly set out the firm's approach to client risk assessment, customer due diligence, ongoing monitoring, suspicious activity reporting, and record keeping. It should be reviewed and updated at least annually, or whenever there are significant changes to the firm's business, client base, or the regulatory environment.

Firms that lack documented AML policies, or whose policies are out of date, will be viewed as non-compliant by their supervisory body. In the current regulatory climate, with OPBAS driving higher standards across all professional body supervisors, this is a risk that no firm can afford to take.

How Policy Pros Can Help

Policy Pros specialises in writing clear, comprehensive AML policies and procedures for UK professional services firms. Whether you need a complete suite of anti-money laundering policies or a review of your existing documentation, our experienced policy writers can help you meet your obligations under the Money Laundering Regulations 2017 and satisfy the expectations of your professional body supervisor. We also provide financial policy writing services covering sanctions compliance, anti-bribery, and the prevention of facilitation of tax evasion. Contact us to discuss how we can support your firm's AML compliance.