SYSC326 - News (2021)

News (2021)

Links to articles and announcements on financial crime.

2024 2023 2022 2021 2020 2019

JMLSG - Publishes revisions to AML Guidance
20-12-21 - The Joint Money Laundering Steering Group ('JMLSG') published amendments to Part I Chapter 5.7 (Monitoring customer activity) of its Guidance, together with a clarificatory amendment to Part II Sector 16 (first page). The new text is available under the “Revisions” tab under “Guidance”, and has been submitted to HM Treasury for Ministerial approval.

JMSLG - Syndicated Lending (Consultation)
16-12-21 - The JMLSG published a proposed revision to Part II Sector 17 (Syndicated Lending) of its Guidance. The proposed revision is a new paragraph (17.29A) to be inserted within Sector 17. Interested parties who wish to comment on the revision should submit their comments to the JMLSG by 17th January 2022.

FCA - HSBC Bank plc fined £63.9 million for deficient transaction monitoring controls
17-12-21 - The Financial Conduct Authority ('FCA') fined HSBC Bank plc ('HSBC') £63.9m for failings in its anti-money laundering processes, linked to transaction monitoring systems, which showed serious weaknesses over a period of eight years from 31 March 2010 to 31 March 2018. Under the Money Laundering Regulations 2007, HSBC was required to establish and maintain appropriate and risk-sensitive policies and procedures relating to ongoing monitoring. These are needed to identify complex or unusually large transactions, unusual patterns of transactions which have no apparent economic or visible lawful purpose and any other activity that is regarded as particularly likely by its nature to be related to money laundering or terrorist financing.

EBA - Revised Guidelines for AML/CTF supervision
16-12-21 - The European Banking Authority ('EBA') published proposals for revised Guidelines on risk-based supervision of credit and financial institutions’ compliance with anti-money laundering and countering the financing of terrorism ('AML/CFT') obligations. Guidelines set out steps supervisors should take to ensure adequate AML/CFT oversight of their sector and support the adoption, by credit and financial institutions, of effective ML/TF risk management policies and procedures.

Companies House - Updated guidance on reporting discrepancy about a beneficial owner on the PSC register
14-12-21 - Companies House updated its guidance on how to make a report if an obliged entity identifies information it holds about a beneficial owner is different from the information on the people with significant control ('PSC') register. An obliged entity is any entity which is required to carry out due diligence checks under anti-money laundering regulations. A discrepancy exists when a relevant entity has information that clearly indicates that the PSC information recorded by Companies House is inaccurate.

Transparency International UK - Money laundering risks in e-payments
14-12-21 - Transparency International UK analysed 261 UK firms approved by the Financial Conduct Authority ('FCA') to operate as Electronic Money Institutions ('EMI') and reportedly found 100 EMIs (38 per cent) with potential money laundering red flags. In its report 'Together in Electric Schemes' TI UK explores the risks associated with EMIs operating in the UK, and calls for more proactive supervision of their activities than there has been to date.

FCA - NatWest fined £264.8 million for anti-money laundering failures
13-12-21 - National Westminster Bank Plc (NatWest) fined £264.8m following convictions for three offences of failing to comply with money laundering regulations. The sentencing judge at Southwark Crown Court, said: '….it must be borne in mind that although in no way complicit in the money laundering which took place, the Bank was functionally vital. Without the Bank – and without the Bank’s failures - the money could not be effectively laundered.' An FCA spokesman said "NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious. Combined with serious systems failures, like the treatment of cash deposits as cheques, these failures created an open door for money laundering."

PSR - CP21/10 Authorised Push Payment scams - Consultation paper
18-11-21 - The Payment Services Regulator ('PSR') issued a Consultation Paper which proposes: (i) Payment Service Providers in the 12 largest banking groups in Great Britain and 2 largest banks in Northern Ireland (outside those banking groups) to publish performance data in relation to APP scams, and reimbursement levels for victims; (ii) Improve scam prevention: task industry to improve intelligence sharing, to improve detection and prevention of APP scams: and (iii) Reimbursing victims: there should be mandatory reimbursement for victims of scams who have done nothing wrong. The consultation is open until 14 January 2022.

Gambling Commission - Financial penalty and Warning, Buzz Group Ltd
19-11-21 - The Gambling Commission fined Buzz Group Ltd £780,000 and issued a formal warning. The sanction related to social responsibility and money laundering failures between October 2019 and December 2020. Weaknesses included source of funds checks being over reliant on open source or anecdotal information (e.g., staff relying heavily on assurances provided verbally by customers) and insufficient records of AML interactions with customers (eg., it was often unclear what had been discussed during those interactions).

FCA - Sunrise Brokers LLP fined for serious financial crime control failings
12-11-21 - The Financial Conduct Authority ('FCA') fined Sunrise Brokers LLP £642,400 for serious financial crime control failings in relation to cum-ex trading. The FCA found that Sunrise had deficient systems and controls to identify and mitigate the risk of facilitating fraudulent trading and money laundering in relation to business introduced by the Solo Group, between 17 February 2015 and 4 November 2015. Trading was characterised by a circular pattern of large-scale purported OTC equity trading, back-to-back securities lending and forward transactions – characteristics which are highly suggestive of financial crime.

FCA - Warning Notice Statement 21/4
03-11-21 - The Financial Conduct Authority ('FCA') published details about a Warning Notice issued in August 2021, where the FCA considered that an interdealer broker had serious failings in relation to the financial crime risk arising from cum/ex trading by clients introduced by a particular group of related entities, between January and September 2015. The firm’s failings left the firm exposed to the risk that it could be used to further financial crime.

OFSI - Updated Guidance for the Charity Sector
01-11-21 - The Office of Financial Sanctions Implementation ('OFSI') published updated guidance for the Charity Sector on the UK's Financial Sanctions regime. The document covers questions relevant to charities and non-governmental organisations ('NGOs'), especially those operating in areas where financial sanctions are in force. It should be read alongside OFSI’s Financial Sanctions Guidance.

HMT - Money laundering and terrorist financing controls in overseas jurisdictions – advisory notice
28-10-21 - HM Treasury issued an updated Advisory Notice: Money Laundering and Terrorist Financing controls in higher risk jurisdictions. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’) require the UK regulated sector to apply enhanced customer due diligence in relation to high-risk countries.

HMRC - Economic Crime (Anti-Money Laundering) Levy
27-10-21 - HMRC published a Policy Paper on the Government's decision to establish an Economic Crime (Anti-Money Laundering) Levy (‘the levy’) on entities that are regulated for anti-money laundering ('AML') purposes. The levy will first be charged on entities that are regulated during the financial year from 1 April 2022 to 31 March 2023, and the amount payable will be determined by reference to their size based on their UK revenue from periods of account ending in that year. Amounts will be payable following the end of each financial year. Therefore, first payments will be made in the financial year from 1 April 2023 to 31 March 2024.

FCA - Credit Suisse fined £147m for finnacial crime failings
19-10-21 - The Financial Conduct Authority ('FCA') fined Credit Suisse over £147 million for serious financial crime due diligence failings related to loans worth over $1.3 billion, which the bank arranged for the Republic of Mozambique. Between October 2012 to March 2016, Credit Suisse failed to properly manage the risk of financial crime within its emerging markets business. It had sufficient information from which it should have appreciated the unacceptable risk of bribery associated with certain loans and a bond exchange related to government sponsored projects. Credit Suisse also agreed to forgive US$200 million of debt owed by the Republic of Mozambique as a result of these tainted loans.

HMRC - Money laundering: understanding risks and taking action for trust or company service providers
08-10-21 - HMRC issued updated guidance on money laundering and terrorist financing risks posed by Trust or Company Service Providers (TCSP). The range of services offered by the businesses HMRC supervises can include higher and lower risk activities. The overall risk increases when TCSP services are provided with other financial, legal or accountancy services. It is important that businesses understand and properly appraise the risk presented by each business activity, customer or class of customer and properly reflect this in their risk assessment. HMRC expects a risk assessment to be more than a ‘tick box’ approach; it should reflect the business’s customer base and the nature of the services that the business provides and counter any risk that its services could be exploited for money laundering, and/or terrorist financing purposes.

FCA - Financial Crime Guide Update
07-10-21 - The Financial Crime Authority ('FCA') published 'Release 12' - its latest update to the regulator's Financial Crime Guide: A firm’s guide to countering financial crime risks ('FCG'). The FCG does not form part of the FCA Handbook, but does contain guidance on Handbook rules and principles. The FCG does not incorporate a change-log to help identify updates applied to content; which reflects the findings of thematic reviews, enforcement actions and other FCA publications, with some coverage of emerging risks and concerns.

FCA - Financial Crime: analysis of firms’ 2017-2020 REP-CRIM data
07-10-21 - The Financial Crime Authority ('FCA') published its analysis of Annual Financial Crime Reporting via REP-CRIM submissions, for the 3 reporting periods between 2017-2020, based on a total of 5,685 REP-CRIM submissions from over 2,300 different firms. The FCA's analysis aims to provide Money Laundering Reporting Officers and industry practitioners insights on trends and developments, which should help inform the arrangements and risks of their respective firms. The scope of REP-CRIM is set out in FCA Handbook SUP 16.23.

FCA - NatWest Plc pleads guilty in criminal proceedings
07-10-21 - National Westminster Bank Plc ('NatWest') entered guilty pleas at Westminster Magistrates’ Court to criminal charges brought by the Financial Conduct Authority ('FCA') under the Money Laundering Regulations 2007 (MLR 2007). The prosecution relates to compliance failings in the period November 2012 to June 2016, in relation to the accounts of a UK incorporated customer. The case has been referred to the Southwark Crown Court for sentencing. This is the first criminal prosecution under the MLR 2007 by the FCA.

UK Finance - Anti-Bribery and Corruption guidance
30-09-21 - UK Finance published ABC guidance on a practical and risk-based definition of public officials for the purposes of anti-bribery and corruption compliance. The paper sets out the technical approach and recommended guidance to help industry work to a consistent definition. Each firm will need to apply its own risk appetite, but the guidance proposes a broad approach building on both international legal analysis and recent case law, including on borderline cases such as public contractors and State-Owned Enterprises.

HMT - National risk assessment of proliferation financing
23-09-21 - HM Treasury (HMT) published a National Risk Assessment (NRA) of proliferation financing (PF) risk in the UK. The first comprehensive assessment of PF risk in the UK, using evidence from government and non-government partners. The assessment will be updated periodically to reflect new threats and risks in the PF space. The NRA conclusion mentions HMT's intention to introduce new provisions to the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, to require both the UK government and private sector to carry out PF risk assessments in the same way that they do for Money Laundering and Terrorist Financing.

JMLSG - Revised sectoral guidance
23-09-21 - The Joint Money Laundering Steering Group ('JMLSG') published (i) A revised sectoral piece in Part II of its Guidance – Sector 15 (Trade Finance); and (ii) Proposed revisions to Part I Chapter 5.7 (Monitoring customer activity) of its Guidance.

HMT - Economic Crime (Anti-Money Laundering) Levy: draft legislation
21-09-21 - HM Treasury published a Policy Paper setting out measures to introduce draft legislation for a new levy on the anti-money laundering ('AML') regulated sector – the Economic Crime (Anti-Money Laundering) Levy, or ‘ECL’. AML-regulated entities with over £10.2 million in UK revenue will be liable to pay the levy, which will first be collected in 2023/24 (April 2023 – March 2024). The levy will be collected by the three public sector AML statutory supervisors: the Financial Conduct Authority, HM Revenue & Customs, and the Gambling Commission. A technical consultation is being held on the ECL draft legislation ahead of its inclusion in the 2021-22 Finance Bill, to ensure the legislation operates as intended. The consultation period ends on 15 October 2021.

OPBAS - Report on progress and themes from 2020/21
20-09-21 - The Office for Professional Body Anti-Money Laundering Supervision ('OPBAS') released a report on progress made in tackling money laundering by professional body supervisors in the accountancy and legal sector ('PBS'), highlighting differing levels of achievement and some significant weaknesses. Many PBSs had not implemented a risk-based approach to their AML supervisory and enforcement work, and gaps remain in most PBS enforcement frameworks.

FCA - Warning Notice Statement 21/1 (Market Abuse)
10-09-21 - The Financial Conduct Authority (FCA) published details of warning notices issued in July 2021 to three individuals who were traders at a bank, who deliberately engaged in market abuse. They placed large orders for futures on a trading platform that they did not intend to execute (“Misleading Orders”) on the opposite side of the order book to small orders which they did intend to execute (“Genuine Orders”). Through Misleading Orders, the individuals falsely represented to the market an intention to buy or sell when their true intention was the opposite. The individuals’ intention in placing the Misleading Orders was to facilitate the execution of the Genuine Orders. The FCA considers that this behaviour constituted market abuse because in placing the Misleading Orders they gave false and misleading signals and a false or misleading impression as to the supply or demand of the futures to which the Misleading Orders related.

FCA & PRA - Dear CEO Letter: Trade Finance Activity
09-09-21 - The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) issued a Dear CEO letter setting out their expectations of firms which carry out trade finance activity. Such firms should be able to demonstrate they have taken a risk sensitive approach to their control environment that ensures the relevant risks are effectively mitigated. Relevant firms are expected to carry out a financial crime risk assessment, incorporating consideration of fraud and money laundering risk, as well as counterparty analysis, transaction approval and transaction payments. The regulator(s) may ask to see the risk assessment carried out and any follow-up action undertaken as a result.

HMT - Countering Terrorist Financing Guidance
02-09-21 - UK Government issued guidance on its approach to tackling terrorist financing via the Counter-terrorism strategy (CONTEST) 2018, which seeks to: (i) reduce the threat of terrorist financing by detecting, preventing, deterring and disrupting the flow of terrorist finance; (ii) understanding terrorist finance activity by exploiting financial intelligence to prevent and detect illicit activity; and (iii) investigate terrorist finance activity to disrupt and deter illicit activity and hold terrorist financiers to account.

FCA - Afghanistan and potential financial crime risk
31-08-21 - The FCA published a reminder that firms should be aware of the recent developments in Afghanistan and the possible impact these events may have on patterns of financial activity when they assess risks related to particular customers and flows of funds. Specifically, firms should ensure they: (i) appropriately monitor and assess transactions to Afghanistan to mitigate the risk of their firm being exploited to launder money or finance terrorism; (ii) report suspicious activity to the UK Financial Intelligence Unit at the National Crime Agency ('NCA'); and (iii) meet their obligations under Money Laundering Regulations and terrorist financing legislation.

OFSI - Chemical Weapons
20-08-21 - The Office of Financial Sanctions Implementation ('OFSI') is responsible for implementation of financial sanctions in the UK. The Chemical Weapons (Sanctions) (EU Exit) Regulations 2019 provide for the freezing of funds and economic resources of certain persons, entities or bodies involved in the proliferation and use of chemical weapons. The Foreign, Commonwealth and Development Office updated the UK Sanctions List with details of persons who are subject to asset freeze for chemical weapons concerns.

NCA - SARs Reporter Booklet
16-08-21 - The National Crime Agency ('NCA') published a collection of case studies provided by law enforcement agencies and other end users of Suspicious Activity Reports ('SARs'), demonstrating how they continue to be instrumental in instigating and supporting investigations to tackle a wide range of the highest priority threats identified by the National Strategic Assessment of Serious and Organised Crime ('NSA').

OFSI - Imposes monetary penalty
05-08-21 - The Office of Financial Sanctions Implementation (OFSI) imposed a £50,000 monetary penalty on TransferGo Limited (TransferGo) for breaches of the The Ukraine (European Union Financial Sanctions) (No. 2) Regulations 2014 (the UK Regulations) - Making funds available to a designated person, without a licence.

EBA - Consultation on new Guidelines on the role of AML/CFT compliance officers
02-08-21 - The European Banking Authority (EBA) launched a public consultation on new Guidelines on the role, tasks and responsibilities of anti-money laundering and countering the financing of terrorism (AML/CFT) compliance officers. They set clear expectations of the role, tasks and responsibilities of the AML/CFT compliance officer and the management body and how they interact, including at group level. The deadline for submitting comments is 2 November 2021.

FCA - Dear CEO letter: SME Lending - Expectations of firms in reporting BBLS fraudulent activity
28-07-21 - The FCA issued a Dear CEO letter setting out its expectations that lenders should report any instances to the FCA where a firm, as a Bounce Back Loan Scheme (BBLS) borrower, has committed or otherwise been involved in fraudulent activity. This means that if there are allegations of fraud regarding an authorised firm (or a firm registered for supervision under the Money Laundering Regulations (Annex 1 firms)) then the regulator expects the lender, after completing its initial investigations to understand the validity of the allegation, to inform the FCA.

EC - EU rules on public-private partnerships (PPPs)
27-07-21 - European Commission Consultation launched for input from EU Member States, national and EU competent authorities, as well as businesses and service providers subject to anti-money laundering and countering the financing of terrorism rules. The aim is to obtain information with regard to, for example, the types of public-private partnerships currently operating in the EU Member States and the effectiveness/success of those partnerships in fighting money laundering and terrorist financing.

HMT - Call for Evidence: Review of the UK’s AML/CFT regulatory and supervisory regime
22-07-21 - HM Treasury (HMT) published a call for evidence covering a broad range of questions across the regulatory and supervisory regimes. It seeks views from industry, law enforcement, supervisors and the broader public and civil society on the systemic effectiveness of the regimes and how they contribute to the overarching objective of countering economic crime, and on the specific application and effectiveness of particular elements of the regimes. The closing date for comments to be submitted is 14 October 2021.

HMT - Consultation on Amendments to Money Laundering Regulations
22-07-21 - HM Treasury published a consultation document on proposed amendments to the Money Laundering, Terrorist Financing and Transfer of Funds Information on the Payer) Regulations 2017. HMT seeks views on amendments to the scope of the regulated sector to exempt particular payment service providers which may present low risk of ML and TF. Potential activities for exclusion are account information service providers (AISPs), bill payment service providers (BPSPs), and telecom, digital, and IT payment service providers (TDITPSPs). Payment initiation service providers (PISPs) have been suggested for exclusion from the regulated sector, but the consultation also seeks views on the potential ML/TF risks presented by PISPs. The consultation also seeks to provide further clarity to the art sector with regard to an amendment to the current definition for Art Market Participants. Respondents should provide comments by 14 October 2021.

FCA - Business Plan 2021/22
15-07-21 - The FCA published its Business Plan for 2021/22. This mentions high-level intentions to address financial crimes, such as, fraud and market abuse. The plan also mentions the FCA maintaining a list of cryptoasset businesses that aren’t registered with the FCA, so everyone can see they aren’t complying with anti-money laundering regulations. On Market abuse and financial crime, the FCA wants the firms it regulates to be effective in preventing market abuse and reducing the risks of financial crime. The regulator intends to continue monitoring transactions in financial instruments, assessing Suspicious Transaction and Order Reports (STORS) and following up intelligence from whistleblowers on financial crime or fraud.

FCA - Annual Report and Accounts 2020/21
15-07-21 - The FCA published its Annual Report and Accounts for 2020/21 which, with regard to anti-money laundering (AML) includes: "During 2020, in addition to our informal ongoing supervisory action, we handled 97 cases involving AML, put in place 1 Voluntary Requirement Notice (VREQ), progressed 5 s166/skilled person assessments and progressed 15 enforcement cases related to AML failings, 1 of which is a new case for the period. No Own Initiated Requirements (OIREQs) were issued for the period".

HMT - Money laundering and terrorist financing controls in overseas jurisdictions – advisory notice
12-07-21 - HM Treasury issued an updated Advisory Notice: Money Laundering and Terrorist Financing controls in higher risk jurisdictions. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’) require the UK regulated sector to apply enhanced customer due diligence in relation to high-risk countries.

ESMA & EBA - Assessing suitability of management body members and key function holders
02-07-21 - The European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) published revised final joint Guidelines on assessing the suitability of members of the management body and key function holders. The Guidelines incorporate amendments introduced by the revised Capital Requirements Directive (CRD V) and Investment Firms Directive (IFD), and their effect on the assessment of the suitability of members of the management body, in particular with regard to money laundering and financing terrorism risks, and gender diversity. The joint final Guidelines will apply from 31 December 2021.

Wolfsberg Group – Demonstrating Effectiveness
30-06-21 - The Wolfsberg Group published a statement setting out how Financial Institutions (FIs) can assess risk in defined priority areas and demonstrate their Anti-Money Laundering/Combatting Terrorist Financing (AML/CTF) programme effectiveness.

FCA - Dear CEO letter ('Action needed in response to common control failings identified in anti-money laundering frameworks')
29-06-21 - The FCA published a 'Dear CEO Letter (Retail Banks portfolio only)' referencing action needed in response to common control failings identified in anti-money laundering frameworks. The regulator highlights common weaknesses in key areas of firms’ financial crime systems and control frameworks, relating to: Governance and Oversight, Risk Assessments, Due Diligence, Transaction Monitoring and Suspicious Activity Reporting. Firms are expected to: (a) Complete a gap analysis against each common weakness by 17 September 2021; and (b) Take prompt and reasonable steps to close any gaps identified.

FATF - Guidance on proliferation financing risk assessment and mitigation
29-06-21 - The Financial Action Task Force (FATF) published 'Guidance on proliferation financing risk assessment and mitigation'; focusing on new obligations under R.1 and INR.1 on proliferation financing risk assessment and mitigation introduced in October 2020 (i.e. countries and private sector entities to identify, assess, understand and mitigate proliferation financing risks). The Guidance comprises: Section 1: Assessment of proliferation financing risks; Section 2: Mitigation of proliferation financing risks; and Section 3: Supervision of proliferation financing risk assessment and mitigation.

FATF - Money Laundering from Environmental Crimes
28-06-21 - The FATF published a Report identifying methods that criminals use to launder proceeds from environmental crime. Report highlights include the role the private sector can play in detecting financial flows from environmental crimes. The FATF study identifies good practices and risk indicators to help financial and non-financial sectors detect potential cases.

FCA - UAB Finolita Unio (electronic money institution)
10-06-21 - A First Supervisory Notice issued by the FCA imposed requirements on UAB Finolita Unio, an electronic money institution based in Vilnius, Lithuania, which, until 8 June 2021 had an e-money institution licence issued by the Bank of Lithuania. The Firm provides services to customers in the UK under the Temporary Permissions Regime. The Bank of Lithuania revoked the Firm’s licence due to severe infringement of anti-money laundering (“AML”) and counter-terrorist financing (“CTF”) requirements. The FCA Notice identifies the Firm failed to inform the FCA of the Bank of Lithuania's investigation into its AML/CTF systems and controls, or the departure of its Chief Compliance and Risk Officer. Immediate requirements imposed by the FCA include the firm should not, without the FCA's prior written consent, carry out any payment services (as defined in regulation 2(1) of the Payment Services Regulations 2017).

PSR - Proposed Strategy
10-06-21 - The Payment Services Regulator ('PSR') issued a Proposed Strategy document setting out an approach to making payments and payment systems work well, with fair competition and access to payments for all. The PSR invites responses by 10 September 2021. Authorised Push Payment ('APP') scams remain the second largest type of payment fraud both in the volume of scams and value of losses. As criminals become more imaginative the PSR observes that attempts to steal money could get worse in the future.

Law Commission - Corporate Criminal Liability (discussion paper)
09-06-21 - A Law Commission Consultation concerns the criminal liability of legal persons, such as companies and limited liability partnerships. At present such legal persons usually may only be convicted of a criminal offence if it is an offence without any fault element, sometimes known as a “strict liability” offence, or because an individual or group of individuals who are very senior within the organisation has the necessary fault element. Views are invited on whether the law should be reformed and responses invited to related questions about the criminal liability of corporations for economic crime, and about the individual liability of directors and senior managers for offences committed by corporations. Responses are invited from 9 June to 31 August 2021.

FCA - Temporary Registration Regime extended for cryptoasset businesses
03-06-21 - FCA Press Release announced extending the end date of the Temporary Registrations Regime ('TRR') for existing cryptoasset businesses from 9 July 2021 to 31 March 2022. Established in 2020 the TRR allows existing cryptoasset firms that applied for registration before 16 December 2020, and whose applications are still being assessed, to continue trading. Many cryptoasset firms are not meeting standards required under the Money Laundering Regulations, which require measures to identify and prevent the transfer and disguise of funds from criminal activity, or funding of terrorist groups.

NCA - National Strategic Assessment (NSA) of Serious and Organised Crime (2021)
25-05-2021 - The National Crime Agency ('NCA') issued its 2021 National Strategic Assessment (NSA) of Serious and Organised Crime. The report uses intelligence from across law enforcement, government, the third sector and private industry to set out the UK’s understanding of the threat posed by organised criminals. With commentary on various financial crime typologies, the NSA notes it is highly likely that over £12 billion of criminal cash is generated annually in the UK, and a realistic possibility that the scale of money laundering impacting on the UK (including through UK corporate structures or financial institutions) is in the hundreds of billions of pounds annually.

FCA - Sapien Capital Ltd fined for serious financial crime control failings in relation to cum/ex trading
06-05-2021 - The FCA fined Sapien Capital Ltd £178,000 for failings which led to the risk of facilitating fraudulent trading and money laundering. The fine was reduced due to serious financial hardship. Cum-ex trading involves trading of shares on or just before the last cum-dividend date. If in a suitable jurisdiction this can allow a party to claim a tax rebate on withholding tax, sometimes without entitlement. Sapien did not undertake appropriate due diligence and failed to perform effective risk assessments.

HOC - Research Briefing, Corporate criminal liability
05-05-2021 - The House of Commons (HOC) Briefing Paper includes commentary on outcome of a 2020 Call for Evidence, resulting in the Government saying it had not identified a clear consensus on the best path for reform, and having asked the Law Commission to undertake a review (expected to lead to an Options Paper in late 2021). The HOC Briefing Paper notes an unsuccessful attempt to include a new corporate criminal offence in the Financial Services Act 2021, which gained royal assent on 29 April 2021.

HMT & HO - Economic crime plan 2019 to 2022; Progress Paper
04-05-2021 - A joint HM Treasury and Home Office paper provides an update on progress made on delivery of an Economic Crime Plan covering 7 priority areas agreed in January 2019, by the Economic Crime Strategic Board. The paper is a midpoint update on delivery, covering the period July 2019 to February 2021. Some key achievements are highlighted, with 20 of 52 actions delivered. Forward looking activity, inter-alia, includes design and delivery of a Fraud Action Plan, developing legislative proposals to tackle fraud, money laundering, seizing more criminal assets, and strengthening corporate transparency (e.g. Companies House reform).

HM Gov - The Global Anti-Corruption Sanctions Regulations 2021
26-04-2021 - The UK introduced the Global AntiCorruption Sanctions Regulations 2021 (S.I. 2021/488), under the Sanctions and Anti-Money Laundering Act 2018. They provide for the freezing of funds and economic resources of certain persons, entities or bodies involved in serious corruption. 22 entries have been added to the Consolidated List maintained by the Office of Financial Sanctions Implementation (OFSI), with their assets being subject of an asset freeze. Failure to comply with financial sanctions legislation or to seek to circumvent its provisions is a criminal offence.

HMRC - Compliance and registration penalty
20-04-2021 - HM Revenue and Customs issued an updated list of businesses that have received penalty notices from HMRC since implementation of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. A recent addition relates to a £4.5m penalty imposed on Irfan Ltd, a London-based money services business, for failures linked to risk assessments, policies, controls and procedures, due diligence and record keeping.

JMLSG - Proposed revisions to Guidance on expectations of firms
19-04-2021 - The Joint Money Laundering Steering Group (JMLSG) published proposed revisions to Sector 15 (Trade Finance) in Part II of its Guidance. JMLSG Guidance is not legally binding but is acknowledged by the UK FCA and its content submitted to HM Treasury for approval. JMLSG guidance assists regulated firms to comply with their UK anti money laundering (AML) and counter terrorist financing (CTF) obligations. Comments on the proposed revisions should be submitted to the JMLSG by 18th June 2021.

FCA - The importance of purposeful anti-money laundering controls
01-04-2021 - Mark Steward, Executive Director of Enforcement and Market Oversight with the FCA issued a statement on 'The importance of purposeful anti-money laundering controls'. The statement highlights the regulator's desire for regulated firms to actively use: (i) the FCA's Warning List and (ii) the Unregistered Cryptocurrency Businesses List - to safeguard consumers, as well as to ensure any transactions or transfers of funds by or to such firms are properly scrutinised and, where applicable, the subject of suspicious activity reports or other reports to the NCA and the FCA.

FCA - Extension of Annual Financial Crime Reporting Obligation
31-03-2021 - The FCA issued Policy Statement 21/4, setting out an extension of the scope of firms required to submit a REP-CRIM return, increasing the number of firms from c.2,500 to c.7,000; including certain types of payment institution; certain FSMA authorised firms falling within the scope of the Money Laundering Regulations; all electronic money institutions; all Multilateral Trading Facilities (MTFs); all Organised Trading Facilities (OTFs), all cryptoasset exchange providers and custodian wallet providers.

HMT - Money laundering and terrorist financing controls in overseas jurisdictions – advisory notice
24-03-2021 - HM Treasury issued an updated advisory notice regarding the risks posed by unsatisfactory money laundering and terrorist financing controls in a number of jurisdictions. The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLRs 2019) require firms to put policies and procedures in place in order to prevent activities related to money laundering and terrorist financing.

FCA - Criminal proceedings against NatWest Plc
16-03-2021 - The FCA announced commencement of criminal proceedings against National Westminster Bank Plc (NatWest) under the Money Laundering Regulations 2007 (MLR 2007). Allegations involve large cash deposits made to customer accounts and, systems and controls failings. Proceedings are described as the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.

FATF - Trade-Based Money Laundering: Risk Indicators
11-03-2021 - The Financial Action Task Force (FATF) and Egmont Group of FIUs published 'Trade-Based Money Laundering: Risk Indicators', as a supplemenet to their December 2020 report on 'Trade-Based Money Laundering – Trends and Developments'. Risk indicators were derived from data received by the FATF and Egmont Group of FIUs in the course of a Trade-Based Money Laundering (TBML) project.

OFSI - Monetary penalties for breaches of financial sanctions
10-03-2021 - The Office of Financial Sanctions Implementation (OFSI) published guidance on 'Monetary penalties for breaches of financial sanctions'. Entering into force on 1 April 2021, the guidance describes OFSI’s approach to the issue of monetary penalties for breaches of financial sanctions, including coverage of: (i) case assessment; (ii) penalty calculation; and (iii) procedural rights.

FATF - Guidance on Risk-Based Supervision
04-03-2021 - The FATF published Guidance, comprising: Part 1 – Risk-based supervision (e.g. how supervisors should assess the risks their supervised sectors face and prioritise their activities, in line with FATF Standards’ risk-based approach); Part 2 – Strategies to address common challenges (e.g. supervising non-financial businesses and professions and virtual asset service providers); and Part 3 – Country examples from across the global network, of supervision of the financial sector, virtual asset service providers and other private sector entities.

EBA - Key money laundering and terrorist financing risks across the EU
03-03-2021 - The European Banking Authority (EBA) Opinion considers ML/TF risks to which credit and financial institutions are exposed, as well as ML/TF risks that cut across various sectors. The list also includes ML/TF risks that emerge from wider developments such as the COVID-19 pandemic that has an impact on both firms’ AML/CFT compliance and competent authorities’ supervision. The Opinion sets out recommendations to competent authorities aimed at closing these gaps.

US Gov - Major Money Laundering Jurisdictions in 2020
02-03-2021 - The 2021 International Narcotics Control Strategy Report (INCSR) is an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act. It describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2020. Volume I covers drug and chemical control activities. Volume II covers money laundering and financial crimes, page 13 identifies Major Money Laundering Jurisdictions in 2020.

EBA - Revised Guidelines on money laundering and terrorist financing risk factors
01-03-2021 - The European Banking Authority (EBA) published revised Guidelines on ML/TF risk factors. In addition to strengthening financial institutions’ risk-based approaches to AML/CFT, the revision supports the development of more effective and consistent supervisory approaches where evidence suggested that divergent approaches continue to exist. The Guidelines are central to the EBA’s work to lead, coordinate and monitor the fight against money laundering and terrorist financing.

NCA - Guidance for anti-money laundering supervisors on submitting better quality suspicious activity reports (SARs)
28-02-2021 - The National Crime Agency (NCA) issued a United Kingdom Financial Intelligence Unit (UKFIU) Guidance Note, drafted in conjunction with the Office for Professional Body Anti-Money Laundering Supervision (OPBAS). The document aims to provide AML supervisors, including the Professional Body Supervisors (PBSs) overseen by the OPBAS, with guidance on how they and their supervised populations should submit better quality SARs to the NCA.

HOC - Research Briefing, Banking fraud
23-02-2021 - The House of Commons (HOC) Briefing Paper includes: Action Fraud is the UK’s “reporting centre” for fraud cases. Estimates suggest that as little as 3% of cases reported to Action Fraud result in charges or summons being brought against an offender. The police response to fraud has come under much criticism. There are concerns that a high number of cases do not reach the threshold for investigation and that those that do rarely result in offenders being bought to justice. Various stakeholders have called for better coordination across the police to improve service to victims and the quality of investigations.

Gambling Commission - AML Guidance update
22-02-2021 - The Gambling Commission published its revision to the 5th Edition of AML guidance for non-remote and remote casino operators (Revision 2). The guidance is aimed at assisting casino operators to design and implement policies, procedures and controls necessary to mitigate the risks of being used in connection with money laundering and the financing of terrorism. The new version of the guidance has been approved by HM Treasury and comes into effect immediately.

NCA - Updated list of Ancillary Orders
18-02-2021 - The National Crime Agency (NCA) published an updated list of restrictions imposed upon serious organised criminals, supporting the management of serious offenders. Incorporating Serious Crime Prevention Orders, Financial Reporting Orders and Travel Restriction Orders, the list identifies individuals against whom restrictions have been imposed by Courts, following convictions arising from NCA investigations.

UK Finance - UK Sanctions Statutory Instruments Review
18-02-2021 - Published by UK Finance Limited, the Review Paper covers statutory instruments passed in application of the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and replacing regulations made under the European Communities Act 1972, as well as new autonomous regimes such as the Global Human Rights Sanctions Regulations. The paper's scope is financial sanctions and related trade sanctions that could impact financial institutions and firms in international trade. It does not provide an analysis of other types of sanctions such as immigration.

PSR - The PSR plans to bolster protections in payments
11-02-2021 - The Payment Systems Regulator issued a 'Consultation Paper' on proposals to help stop Authorised Push Payment (APP) scams and protect the victims, applicable to Faster Payments and Bacs Direct Credit. Proposals involve: (i) Increasing visibilty on how banks and building societies handle APP scams; (ii) Requiring banks and building societies to adopt a standardised approach to sharing data; and (iii) Extending customer protection across all banks and building societies by changing payment system rules. Responses should be provided by 8 April 2021.

House of Commons Library - Registers of beneficial ownership
08-02-2021 - House of Commons Library briefing paper ('Number 8259') on the concept of beneficial ownership, which exists because the direct legal owner of an asset is not necessarily the person who actually controls and benefits from it. Under the Fifth Anti-Money Laundering Directive, all EU Member States were required to launch publicly accessible registers of the beneficial ownership of companies by January 2020. The paper mentions the UK maintains, or intends to maintain, central registers of beneficial ownership for three types of assets: companies, properties and land, and trusts.

FCA - The Regulator's approach to international firms
03-02-2021 - An FCA 'Approach Document' explains how the regulator will assess international firms against minimum standards when they apply for authorisation and during ongoing supervision by the FCA, and the regulator's expectations of such firms. The document outlines consideration of potential risks (per paragraphs 3.15‑3.36), but makes clear other risks relevant to the firm’s sector and business model will also be considered (e.g. operational resilience and financial crime). The FCA indicates its experience of higher incidences of consumer harm which result in complaints arise fom various factors, including failure to establish adequate controls to prevent financial crime such as scams.

FCA - Consultation Paper CP21/3 - Payment Services and E-Money
28-01-2021 - In its 2020/2021 Business Plan the Financial Services Authority (FCA) identified the payments sector as a priority for the next 3 years. This 'Consultation Paper' proposes: (i) Amendments to technical standards on strong customer authentication (SCA) and common and secure methods of communication (SCA-RTS); (ii) Updates to published guidance in the FCA Approach Document (AD) on Payment Services and Electronic Money; and (iii) Updates and additions to the FCA’s Perimeter Guidance Manual (PERG). AD amendments are intended to help the industry comply with the regulations in a more consistent manner, help to improve the financial stability of firms and support consumer protection. Appendix 1 sets out proposed amendments to the AD relevant to Financial Crime.

SRA - Sectoral Risk Assessment - Anti-money laundering and terrorist financing
28-01-2021 - The Solicitors Regulation Authority (SRA) is responsible for supervising authorised firms on their complaince with anti-money laundering (AML) regulation. The SRA also produces a 'Risk Assessment of its Supervised Sector', to help firms' assessment of the AML risks they are exposed to. The SRA expects firms' to consider the sectoral risk assessment as part of firm-wide risk assessment.

LSAG - Updated AML guidance for the legal sector
20-01-2021 - The Legal Sector Affinity Group (LSAG) issued updated 'Anti-Money Laundering (AML) Guidance' for the legal sector, which reflects implementation of the EU’s 5th Money Laundering Directive. The guidance is published in draft form to replace previous versions of the guidance and is pending approval from HM Treasury. The guidance is jointly compiled by LSAG, which is made up of legal sector regulatory and representative bodies, including the Law Society of England and Wales.

HMRC - Money laundering: understanding risks and taking action for estate agency and letting agency businesses
18-01-2021 - HMRC issued 'Updated Guidance' on money laundering risk assessment and the key areas that estate agency businesses (EABs) and letting agency businesses (LABs) should consider as they carry out supervised business activities. The guidance should be read alongside published HMRC guidance for money laundering supervision and other relevant documents, including the National Risk Assessment (NRA) 2020 and guidance produced by the Financial Action Task Force (FATF).

HMRC - Understanding risks and taking action for money service businesses
18-01-2021 - HMRC issued 'Updated Guidance', on money laundering risk money service businesses (MSBs) should consider as they carry out supervised business activities; to be read alongside HMRC MSB guidance and other relevant documents, including the National Risk Assessment (NRA) 2020 and risk factor guidelines from the European Supervisory Authority.

HMRC - Understanding risks and taking action for Trust or Company Service Providers
18-01-2021 - HMRC issued 'Updated Guidance', reflecting consideration of The National Risk Assessment 2020 which assessed Trust and Company Service Providers (TCSP) as posing a relatively high risk, that risk increasing when provided with other financial, legal or accountancy services. HMRC expects a risk assessment to be more than a ‘tick box’ approach; it should reflect the nature of the services that the business provides and counter any risk that its services could be exploited for money laundering, and/or terrorist financing purposes.

JMLSG - The implications of the end of the Brexit transition period on the JMLSG Guidance
14-01-2021 - The Joint Money Laundering Steering Group (JMLSG) 'Signposts areas within its Guidance' impacted by the UK’s exit from the European Union. References in JMLSG Guidance based on the premise of UK membership of the EU are no longer appropriate and will be amended in due course. Areas include: (i) Definition of ‘third country’ - Now a country other than the UK, as opposed to outside the European Economic Area (EEA); (ii) Part III Section 1: The same level of information is to be provided by UK Payment Service Providers (PSPs), regardless of whether funds are transferred to/from EEA countries or any other third country; (iii) Specific references to observing European Supervisory Authority (ESA) guidelines are no longer appropriate; and (iv) Correspondent relationships involving the execution of payments - Firms should take cognisance of the effectiveness of the AML/CTF regime of any third country when determining the extent of the EDD measures to apply to respondents in that country.

HMT - Guidance Document for the UK’s Equivalence Framework for Financial Services
14-01-2021 - HM Treasury issued 'Guidance' on UK’s equivalence framework. The document notes "Equivalence decisions are compatible with the UK’s policy priorities, including those relating to the rule of law, international sanctions, human rights and efforts to combat money laundering"; and "Withdrawal of equivalence may occur if the UK judges that the overseas jurisdiction no longer delivers equivalent outcomes (or an equivalence decision is no longer compatible with the UK’s policy priorities including the rule of law, international sanctions, human rights and efforts to combat money laundering) and both sides have been unable to agree a solution to satisfactorily address whatever concerns have been raised and maintain equivalence."

ICAEW - Accountancy AML Supervisors’ Group (Risk Outlook)
08-01-2021 - In a 'Risk Outlook' document the Accountancy AML Supervisors’ Group (AASG) sets out the key risks, and red-flag indicators, the AASG considers are relevant to the accountancy sector. They intend to update the document on a regular basis, reflecting the UK’s National Risk Assessment and other emerging threats and trends. The guidance is intended for use by auditors, insolvency practitioners, external accountants and tax advisers, as well as firms providing trust or company services.

FCA - Financial crime systems and controls during coronavirus situation
08-01-2021 - The Financial Conduct Authority updated its 'Guidance to Firms' on Financial crime systems and controls during the coronavirus situation, setting expectations on how firms should apply their systems and controls to combat and prevent financial crime during the crisis.

HMRC - MT Global Limited fined £23.8m for money laundering breaches
07-01-2021 - HMRC fined 'MT Global Limited' for significant breaches of the Money Laundering Regulations between July 2017 and December 2019 relating to: (i) risk assessments and associated record-keeping; (ii) policies, controls and procedures; and (iii) fundamental customer due diligence measures.

HMRC - Check if a business is registered for money laundering supervision
04-01-2021 - HMRC issued an updated 'Supervised Business Register', for use when checking whether a business has registered with HMRC under the Money Laundering Regulations.

OFSI - General guidance for financial sanctions under the Sanctions and Anti-Money Laundering Act 2018
01-01-2021 - 'Updated Guidance' issued by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, which is the authority for the implementation of financial sanctions in the UK. Outlines obligations under financial sanctions as well as OFSI’s approach to licensing and compliance issues. It takes into account relevant case law and guidance at the date of publication.

Legal Privacy Cookies Search