Reported by Martin Arnold, Ellesheva Kissin and Suzi Ring

(Excerpt shared below. To read full report, go to: https://www.ft.com/content/4deb8a5d-003c-446d-b0ad-38b18aa71c2b)

UK law firms and accountants are pushing back against plans for the Financial Conduct Authority to supervise them for the first time as part of a shake-up in the system for fighting money laundering in professional services.

The Treasury said it had decided to address a key vulnerability in the UK’s defences against dirty money by shifting responsibility for supervising the anti-money laundering and counterterrorism finance policies of 60,000 companies from their 23 supervisors to the FCA.

But the move has provoked uproar from industry bodies that currently earn fees for supervising law firms and accountants, which warn it could raise compliance costs and trigger a long period of disruption. Some told the Treasury the loss of fees could put them out of business.

Experts have long complained the UK’s fragmented system of supervising professional services — including lawyers, accountants, and trust and company service providers — through their own industry bodies creates conflicts of interest and leaves it open to corrupt money.