The UK government is setting up a new body that will tackle money laundering and criminal financing. The Office for Professional Body Anti Money Laundering Supervision (OPBAS) will deal with potential weaknesses in the supervisory system and aim to improve its standards. It will also ensure supervisors and law enforcement work together more effectively, the Treasury said.

The new watchdog is part of the Financial Conduct Authority (FCA) and will operate within its existing governance arrangements. OPBAS is expected to be legislated for by the end of the year and should be fully operational by the start of 2018. It will be funded through a new fee on professional body anti money laundering (AML) supervisors.

The Treasury said 25 organisations, 22 of which are accountancy and legal trade bodies, will supervise the several sectors at risk of being attacked by criminals and terrorists. The new watchdog will have the power to penalise theses bodies if they breach any of the new money laundering regulations, it added.

Despite recognising the contribution of these professional body supervisors, the Treasury pointed out that having several organisations supervising the same sectors and issuing guidance can lead to inconsistencies that criminals may look to exploit. As a result, OPBAS will ensure “consistent high standards” across the regime, whilst imposing the minimum possible burden on legitimate business.

Simon Kirby, economic secretary to the Treasury, said, “The new money laundering regulations and the new Office for Professional Body AML Supervision will bring the UK’s anti money laundering regime into line with the latest international standards, and ensure consistently high standards of supervision across all sectors, sending a strong message that money laundering and terrorist financing should not and will not be tolerated.” The Treasury said that serious and organised crime costs the UK at least £24bn every year.”