Mishcon de Reya has published an important note on a regulatory action recently taken by the Financial Conduct Authority (FCA) against Canara Bank in respect of anti-money laundering control failures. Canara Bank has been fined £896,100 and prevented from accepting deposits from new customers for 147 days. Canara is an Indian bank, and the enforcement action applies to its branches in...
FCA AML Report: Mishcon de Reya highlights key points
Mishcon de Reya expects that the FCA will be taking action against firms that are too slow to respond to the requirements of the UK's new money laundering regulations that were introduced in June 2017 in order to implement the EU's fourth money laundering directive. Mishcon notes that the last time new money laundering legislation was introduced in the UK, in 2007, the regulator took enforcement action against firms that did not adapt their internal processes quickly enough, and it expects that the same will happen with the latest round of new requirements.
Mishcon's also notes that the FCA is changing its approach to money laundering supervision to broaden the scope of firms that it inspects. Previously, the Authority had focussed on firms that it thought presented the highest risk (which would typically be large international banks) but now it has plans to visit or review 100 firms tahat it considers present a lower money laundering risk.
These observations are contained in a note on the FCA's Anti-Money Laundering Report for 2017/18. The note is published in the September 2018 edition of Mishon's Enforcement Watch.
Mischon says that the FCA continues to report on the poor AML controls of smaller overseas banks and that it is currently investigating around 75 firms and individuals. Canara Bank was fined for AML failings earlier this year, and Mischon expects further 'significant outcomes.' The FCA's current approach is the begin with both criminal and regulatory investigations, and then decide later on which to use.
Mishcon also notes that the FCA is reporting weaknesses in firms' anti-bribery and corruption controls, perhaps because firms have been focussing so much on AML.
Mishcon de Reya's Enforcement Watch contains a range of important articles about issues on the horizon and enforcement actions that have happened in the recent past. The publication is edited and led by Adam Epstein, a partner in Mishcon's Finance and Banking Group email@example.com