As stated in its 2017-2018 business plan, one of the Financial Conduct Authority’s cross-sector priorities is anti-money laundering (AML). In its view, tackling issues such as AML is a long-term approach; they expect that it will continue to feature in their business plans for the foreseeable future.
Pinsent Masons recently published an interesting article for their out-law.com site, covering the end result of this focus in action, with the FCA imposing financial penalties and sanctions on the UK arm of Canara Bank.
What does this mean? Companies across the Financial Services sector need to be paying attention to what the FCA are doing in relation to AML. They should be looking at their own internal systems and processes (for example, undertaking KYC and other compliance projects) to avoid falling to the same fate as Canara Bank.
We asked Stuart Bazley, Visiting Professor in Financial Regulation and Compliance, BPP University Law School, London for his viewpoint:
Michael Ruck's excellent article entitled ‘FCA focused on anti-money laundering in fight against financial crime’ provides a useful, indeed salutary summary of recent FCA enforcement actions relating to anti-money laundering systems and controls failings - against authorised firms and senior managers. The article rightly makes a link between system and control weaknesses and culture, but it is perhaps its reminder of the enforcement options available to and being considered by the FCA that illustrate the regulatory consequences of not getting in place effective AML systems and controls. No doubt authorised firms have grown used to reading about the imposition of financial penalties as part of a regulatory enforcement outcome, but it may be that the threat of potential prosecution before the criminal courts that will secure the most attention.
We took what we felt were the article’s key points and highlighted them in the infographic below. You can download this as a PDF here.