Author: Nicola Sharp 7 February 2020
Nicola Sharp of corporate crime solicitors Rahman Ravelli considers whether this is likely to change in the near future.
No firm or individual has been prosecuted by the Financial Conduct Authority (FCA) for breaching its new Money Laundering Regulations since they came into effect in 2017.
The FCA has the power under the regulations to criminally prosecute a person or organisation it suspects of not putting in place sufficient safeguards to prevent money laundering. Those found guilty can have a fine imposed or be sentenced to up to two years’ imprisonment.
The FCA has, on a number of occasions, warned of its powers to prosecute. Its 2018-19 Business Plan referred to its ability to use the full range of supervisory and regulatory enforcement tools to tackle money laundering and financial crime. Last year, the FCA’s Director of Enforcement and Market Oversight, Mark Steward, stated that it was time that the regulator “gave effect to the full intention of the Money Laundering Regulations’’ and referred directly to the ability to bring criminal prosecutions.
A Freedom of Information (FOI) request, however, has revealed that only two individuals have been interviewed under caution over suspected criminal breaches of the regulations. The request also led to the FCA stating that it is not currently investigating any firms on suspicion of a criminal breach of the regulations - but it is investigating three individuals. The FCA has also said it is running four dual-track, criminal-civil investigations into money laundering; with one individual and three firms being probed.
While the information that has come out due to the FOI request may raise a few eyebrows, it will be interesting to see whether last month’s changes to the government’s Money Laundering Regulations will have an impact on the FCA’s use of its powers to bring criminal proceedings.
The FCA has stated that the changes that were implemented on the 10 January 2020 seek to “update the UK’s anti-money laundering regime to incorporate international standards set by the Financial Action Task Force (FATF) and to transpose the EU’s 5th Anti Money Laundering directive”. Many will be keeping a close eye on the FCA’s activities in the wake of these changes.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.