In a recent speech at the AML & ABC Forum 2021 Mark Steward (the FCA’s Executive Director of Enforcement and Market Oversight) spoke to stress the importance of “purposeful” anti-money laundering (AML) systems and controls.
He noted that over the last 12 months, two of the biggest sanctions the FCA imposed related to failures to address financial crime and AML risks.
He also discussed how important efficient systems and controls are in identifying suspicious activity.
Conversely, he commented that system and control failures provide an:
“invisible, illicit cover for criminals and criminal activity that affects the whole community, not only in this country but also beyond, and canA imposed related to failures to address financial crime and AML risks. erode confidence in the financial system”.
During his speech he also cited the cases against Commerz Bank London and Goldman Sachs. There were a number of key failures noted, which are relevant to many asset-management firms. These include:
• Not considering the wider risk of transactions, but rather relying on the statements of the deal team
• Not appropriately taking into account high risk jurisdictions
• Not understanding the increased risk from tight deadlines
• Not having a clear process or criteria for terminating a relationship with a customer based on their AML risk
• Not updating the KYC held on clients in a timely manner
• Not understanding the risk associated with politically exposed persons.
He noted at the time that the FCA currently have 42 AML investigations ongoing into firms and individuals (25 are investigations into firms and 17 are investigations into individuals), involving, for example, systems and controls over politically exposed persons, correspondent banking and transaction monitoring.
The full speech can be found here: https://www.fca.org.uk/news/speeches/importance-purposeful-anti-money-laundering-controls