Plans for single AML regulator a backward step in tackling economic crime

UK Government plans to appoint the Financial Conduct Authority (FCA) as sole regulator for anti-money laundering (AML) across the UK have been criticised as a backward step in tackling economic crime by the Law Society of Scotland.

In its response to an HM Treasury consultation the professional body for Scottish solicitors has strongly opposed the move stating it is neither justified or proportionate. It has warned that replacing the current effective, risk-based AML supervision with a UK-wide, one-size-fits-all approach will lead to higher costs for consumers and increased bureaucracy for its members.

The Law Society has emphasised its deep understanding of the particular risks and challenges within the Scottish legal sector alongside its proven track record in ensuring compliance with anti-money laundering requirements.

David Gordon, lay convener of the Law Society of Scotland Regulatory Committee, said: “The decision to impose a regulator which has no specific understanding of the Scottish legal sector is neither justified nor proportionate. We already have a highly effective AML supervisory framework that reflects the unique structure of the Scottish legal system, ensuring safeguards for consumers and which upholds high professional standards within the legal sector.

“The UK Government has already acknowledged our commitment to combating economic crime and raising standards. The proposal to install a single regulator for the whole of the UK will add expense and complexity for law firms without delivering any clear benefits. It will also be detrimental to consumers who will ultimately end up having to pay the price for this increased bureaucracy and reduced efficiency.

“The Law Society’s deep understanding of the risks, challenges, and demographics of Scotland’s legal sector is unmatched. Put simply, we just don’t believe the FCA has the specific sector knowledge and understanding required to be an effective AML regulator in Scotland, particularly if resources and expertise remain concentrated in London. We continue to urge the UK Government to reconsider its decision.”