Jurisdiction(s):
United Kingdom

FCA AML Supervision and Enforcement: s 166 Reviews, Common Banking Failings, Transparency Plans and Prosecution Risks in the UK

Published on: 26 March 2024

Published by a Law360 reporter

Legal News

Article summary

Disclosure in Lloyds Banking Group’s February annual report that the FCA is examining its AML controls places the lender on the long roll of major retail banks that have raised supervisory concerns in recent years. In the previous year, it emerged that Barclays Bank was the subject of an investigation by the regulator over a series of issues connected to its AML and know‑your‑customer frameworks. Several peers, including Banco Santander SA and HSBC Holdings plc, have incurred significant fines. Moreover, NatWest Bank held the unenviable distinction of being the first firm the FCA prosecuted for criminal breaches of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, in December 2021. To date, no further prosecutions have been brought.

This article will briefly outline the AML obligations incumbent on firms, consider why so many fall short of expectations, and set out what the FCA does when failings occur. It will also examine recurring mistakes and summarise the actions the FCA takes when those shortcomings are uncovered.

The Money Laundering Regulations

The AML requirements for a regulated firm are contained in the Money Laundering Regulations. At the most basic level, those regulations impose obligations on banks...

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