A lack of proper oversight across the City of London’s network of lawyers, bookkeepers and accountants is hampering efforts to crack down on dirty money being funnelled through the UK, the City watchdog has warned. The latest report by the Financial Conduct Authority (FCA) flagged concerns over the work of the UK’s 25 professional bodies – which oversee the accounting and legal sectors – and found that some were spending as little as £73 a year on anti-money laundering supervision or were outsourcing it entirely to third parties. It also found “weaknesses” in how bodies were using their powers, resulting in a drop in fines for members who may have breached the rules. Those groups also failed to proactively and consistently share information with authorities, in a way that was “hampering efforts to make a real dent in the flow of illicit funds in the UK”. That is despite six years of urging those professional bodies to improve. The report is the fifth released by the FCA’s Office for Professional Body AML Supervision (OPBAS) which was launched in 2017 to oversee the anti-money laundering work of more than two dozen professional bodies that are expected to suspend or fine members if regulations are breached. They include the Law Society, Council for Licensed Conveyancers, Chartered Institute of Management Accountants, Association of Taxation Technicians, and Solicitors Regulation Authority. It is not clear which bodies were included in the most recent report, which sampled the work of nine unnamed groups. Together, they monitor a wide range of City firms, including those deemed to be at high-risk of being used to facilitate money laundering. Among them are conveyance firms, which transfer properties and assets from one person to another, as well as trust and company service providers, which create corporate entities and vehicles that can be used to disguise the true owners of assets, and hide proceeds of crime. OPBAS is meant to help root out weaknesses in regulation and counter the UK’s longstanding reputation as a dirty money hub. It does not have powers to impose or collect fines from the professional bodies, but can block them from carrying out certain work and recommend that the government remove their designation as an anti-money laundering supervisor. One of the FCA’s directors, Andrea Bowe, said in a statement on Monday that the watchdog was “committed to playing a leading role in reducing and preventing financial crime. Through OPBAS, we have intervened to tackle failings where we have found them. However, we are still not seeing the consistent, effective improvement we need.” Susan Hawley, executive director of campaign group Spotlight on Corruption, said it was a sign that the government needed to step in. “Today’s report shows clearly that leaving the policing of money-laundering rules to professional bodies for lawyers and accountants isn’t working and that things are getting worse. “The Treasury urgently needs to take an ambitious approach and look at fundamental reform of AML supervision because the status quo is no longer tenable. Failing supervisors should for starters have their policing role removed from them as early as possible.” Earlier this year, the UK’s then-deputy foreign secretary, Andrew Mitchell, sparked renewed concern over the illicit flow of cash, after saying that nearly 40% of the world’s dirty money was being funnelled through the City of London and the UK’s crown dependencies. The report released on Monday sampled the work of nine professional bodies – which were not named – and found that “none … were fully effective in all areas”. It also highlighted “weaknesses” in the way they were “using enforcement powers and tools to supervise members, with the number and value of fines issued declining on the previous year”. They fined members just £640,781 over the 2022-23 financial year. That was compared with £940,728 a year earlier, and was the lowest since the £475,217 charged in 2019-20. The FCA said it was a sign that the bodies were not using the full range of their powers in an “dissuasive and proportionate manner”. A Treasury spokesperson said: “We are determined to crack down on money laundering by working with the Office for Professional Body Anti-Money Laundering and reforming the UK’s anti-money laundering and counter-terrorism financing supervisory regime.”