FCA warns of dirty money risks in City of London oversight

The Financial Conduct Authority (FCA) has raised alarms regarding insufficient oversight in the City of London, particularly among professional bodies responsible for monitoring the accounting and legal sectors. A recent report highlighted that some of these bodies are investing minimal resources, with some spending as little as £73 annually on anti-money laundering supervision. This lack of investment and proactive engagement has led to a decline in the enforcement of regulations, with fines for breaches dropping significantly. The FCA's Office for Professional Body AML Supervision (OPBAS), established in 2017, aims to enhance the anti-money laundering efforts of over two dozen professional bodies. However, the report indicates that none of the nine sampled bodies were fully effective in their supervisory roles. The findings suggest that these organizations are not utilizing their enforcement powers adequately, resulting in a decrease in the number and value of fines imposed on members. Despite ongoing pressure for improvement, the report reveals persistent weaknesses in the regulatory framework, which hampers efforts to combat the flow of illicit funds through the UK. The situation is exacerbated by the fact that nearly 40% of the world's dirty money is reportedly funneled through the City of London and its crown dependencies. In light of these findings, campaigners are urging the government to implement significant reforms in anti-money laundering supervision. The Treasury has expressed its commitment to addressing these issues, emphasizing the need for a more robust approach to tackle money laundering effectively.