Financial Services Authority

The FCA and its predecessor FSA fined a number of firms – in April, EFG Private Bank was fined £4.2m – and one person for failing to manage money laundering risk adequately. It also fined Turkish Bank (UK) Ltd £294,000, Habib Bank £542,500, including a £17,500 fine for its anti-money laundering supervisor and Coutts & Company £8.75 million.

In some cases, bank staff dismissed allegations about their customers and appeared to be overly close to high risk individuals, the regulator found.

Each year £10bn of illicit funds pass through the part of the financial services sector subject to money laundering regulations, according to Treasury estimates. This ‘regulated sector’ does not include mortgage brokers.

The FCA made the comments alongside the launch of its first annual report on anti-money-laundering.

According to FCA ML/FT risk issues that may affect regulated firms include:

• Money laundering through trade in digital currencies

• Alternative banking platforms (also known as a payment platform or virtual banks) based in jurisdictions with limited regulatory oversight

• Cybercrime – that is the exploitation of vulnerabilities in private or public telecommunication networks through computer systems or mobile devices for criminal purposes – is another important growing risk.

• The risk that the ‘money service business’ (MSB) sector may be used to launder money or finance terrorism

The fight against money laundering is often a thin line as too stringent enforcement could displace the money laundering risks to businesses operating outside the ‘regulated sector’ thereby playing into the hands of organized crime and money launders and cutting of the poorest and most vulnerable from the financial sector (financial intermediation)…
FCA AML Annual Report 2012