After a relative period of quiet for the SFO with the closure of a number of high-profile investigations and following last year’s headline that the FCA had discontinued seven of its fourteen money laundering investigations, you could be forgiven for thinking that regulators in the business crime and regulatory investigations sphere are diverting their resources elsewhere. However, this week’s news that the FCA are bringing criminal proceedings against NatWest for alleged failures to prevent money laundering could not be a clearer message that: (i) there remains a number of money laundering cases under active FCA investigation; and (ii) clamping down on money laundering by imposing tough penalties remains high up on the FCA's agenda. It marks the FCA’s first prosecution under the Money Laundering Regulations which came into force in December 2007 and is a significant departure from its usual imposition of financial penalties. The FCA’s case against NatWest alleges that the bank failed to prevent money laundering by undertaking appropriate risk sensitive due diligence, with a particular emphasis on the need for ongoing monitoring of a business relationship as part of the customer due diligence process. The Money Laundering Regulations have been updated over the years to place increasing obligations on financial institutions and other high risk businesses such as credit institutions, auditors, estate agents and trust/company service providers to prevent money laundering and terrorist financing. The recent prosecution by the FCA reinforces that anti-money laundering measures should be an integral part of business transactions in the regulated sector and that business relationships should be subject to ongoing scrutiny. It serves as a timely reminder that notwithstanding the recent challenges faced by businesses as a result of the pandemic, there can be severe consequences of failings in AML compliance.
The Financial Conduct Authority (FCA) has commenced criminal proceedings against NatWest Plc for offences under the Money Laundering Regulations 2007
More posts by Laura Beament
Recent posts from Burges Salmon blog