Regulation  

FCA fine for AML control failure unlikely to be last

Michael Ruck, senior financial services enforcement lawyer for Pinsent Masons, previously worked for the FCA. He said it was right that the regulator should issue a fine for failures relating to the bank’s anti-money laundering policies and procedures for corporate customers connected to politically-exposed persons.

Mr Ruck added: “This may be the first FCA enforcement action concerning anti-money laundering systems and controls at banks but it is very unlikely to be the last.

“Following from the FCA’s action on anti-bribery and corruption systems and control failings at insurance brokers, the action against Standard Bank illustrates the FCA’s increasing focus on financial crime.”

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He said that banks and regulated firms needed to ensure their systems and controls in these areas met the FCA’s “high regulatory standards”.

Tracey McDermott, director of enforcement and financial crime for the regulator, said it was the first time that the FCA, or its predecessor the FSA, had brought an anti-money laundering case that focused on commercial banking activity.

Background:

Between 15 December 2007 and 20 July 2011, Standard Bank failed to comply with regulation 20(1) of the money laundering regulations. It was found to have failed to take reasonable care to ensure that all aspects of its anti-money laundering policies were applied appropriately and consistently to corporate customers connected to Peps.

During the relevant period the bank had business relationships with 5339 corporate customers of which 282 were linked to one or more Peps.