Mark Steward, executive director of enforcement and market oversight at the U.K. Financial Conduct Authority (FCA), recently shared insights into the agency’s pipeline of anti-money laundering (AML) investigations and what lies ahead for regulated firms.
Currently, the FCA has 42 ongoing investigations—25 into firms and 17 into individuals—related to money laundering, Steward said in remarks delivered at the AML & ABC Forum 2021 on March 24. A transcript of the speech was published Thursday. Examples of focus for the probes include “systems and controls over politically exposed persons, customers with significant cash intensive operations, correspondent banking and trade finance, and transaction monitoring,” Steward said.
Moving forward, key priorities for the FCA will be “detection; investigation; and prosecution, where necessary, either civilly or criminally, of breaches of the Money Laundering Regulations and/or the Principles for Business,” Steward said.
The FCA has over the last 12 months increased its surveillance of “online investment promotions targeting offers from unauthorized firms; potential investment scams; and other too-good-to-be-true promotions, including lead generation sites,” he said. “A number of these sites are under investigation or have become the subject of proceedings.”
Steward added the FCA has also issued alerts on its Warning List concerning “well over 1,000 firms, an increase of over 100 percent” from 2019.
Compliance message: As of Jan. 10, the FCA is the AML supervisor of cryptocurrency firms, meaning they are required to be registered with the agency and comply with the Money Laundering Regulations. “We have now developed a version of the Warning List, called the Unregistered Cryptocurrency Businesses List, to help consumers and FCA-authorized firms identify cryptocurrency firms that appear to be carrying on business in the U.K. but are not registered with the FCA or sought such registration,” Steward said.
In early March, the FCA placed the first names on this list and added 29 crypto custodian wallet providers to the list. “Without commenting on what other steps may be taken to enforce the new obligations, appearing on the list should be a warning for FCA-authorized firms, including any banks who may be providing banking services to these firms, as well as consumers,” he said.
Concluded Steward, “We know much of the industry is devoted to strong systems and controls in relation to AML. Indeed, the aim of AML regulation is not to catch anyone out but to set high standards of probity and scrutiny to inhibit illicit money flows in the financial system and to encourage participants in the system to behave as custodians and guardians of the public interest in preventing money laundering.”
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