Emma RadmoreThe LSB has published updates to the CRM Code following its review. The new provisions include those on governance and oversight, and will take effect from 14 June 2021.
Category - Financial Crime Prevention
FS Bill continues in Lords
The Financial Services Bill is scheduled to continue its Report stage in the House of Lords next week, with some further amendments being tabled.
OFSI updates guidance suite
OFSI has updated its suite of guidance on financial sanctions, including its guidance on monetary penalties, which incorporates some of the lessons OFSI has learned through its case work. The new guidance will apply for...
FCA extends financial crime reporting obligation
Following its consultation in August 2020, the FCA has announced it is increasing the number of firms that need to submit an annual REP-CRIM return from c.2,500 to c.7,000 firms. In summary, the following additional...
Lucy HadrillTreasury updates high risk jurisdictions list
Treasury has updated its AML advisory notice on high risk jurisdictions. The UK is introducing legislation that will define high risk third countries and will replicate the FATF list, in place of referencing the EU MLD4...
FCA encourages individuals to report wrongdoing
The FCA has launched its campaign ‘In confidence, with confidence’ to encourage individuals working in financial services to report potential wrongdoing to the FCA. The campaign highlights circumstances...
Hannah FrostFATF updates guidance on risk-based approach to VAs and VASPs
FATF is updating its guidance on the risk-based approach to virtual assets (VAs) and virtual asset service providers (VASPs). The guidance is updated in six key areas and amendments seek to: clarify the definitions of...
IRSG publishes report promoting global regulatory coherence
The International Regulatory Strategy Group (“IRSG“) published a report entitled “Global Solutions to Global Problems”. The report aims to promote regulatory coherence in financial services to...
Duncan ScottHMRC publishes AML supervision self-assessment
HMRC has published its assessment of its own performance as AML supervisor. It notes that it currently supervises over 30,000 businesses across the various sectors within its remit. It says its performance is broadly...
EBA consults on AML guideline change
EBA is consulting on changes to its guidance on risk-based supervision for AML/CFT purposes. It plans to include practical step-by-step approaches to help regulators understand some of the aspects of supervision they...
FCA takes action against NatWest for MLR breaches
FCA has started criminal proceedings against Nat West for breaches of the MLR 2007. It alleges that, over a 5 year period up to late 2016, the bank breached MLR 8(1), 8(3) and 14(1) in relation to funds deposited into...
NCA updates SARs guidance for supervisors
NCA has published an updated version of its guidance to AML supervisors on submitting better quality SARs. It reiterates the importance of: the SAR being clear and concise, explicitly setting out the reason for...
FS Bill finishes Lords Committee stage
The Financial Services Bill has finished its discussions at Committee Stage in the Lords. The next stage, the Report stage, has not yet been announced.
OFSI updates sanctions penalty guidance
OFSI has published an updated version of its guidance on monetary penalties for breach of financial sanctions, which will apply from 1 April and will apply for all cases where OFSI becomes aware of a potential breach...
FS Bill at Committee Stage in Lords – including new FTP offence
The Financial Services Bill is currently going through line by line scrutiny in the Committee stage in the House of Lords. Among the changes for debate are: an requirement for a member of the FCA governing body to have...
FATF publishes RBA guidance
FATF has published guidance for supervisors in applying a risk based approach to supervision of the AML supervised community. It aims to help those supervisors who have traditionally applied rules-based approaches to...
Proprietary injunction and Bankers Trust Order made in fraud case involving cryptocurrency
In the unreported case of Ion Science Ltd v Persons unknown and others (21 December 2020 – Commercial Court), the Commercial Court granted a proprietary injunction, worldwide freezing order and ancillary...
Scott NodderFCA fines and bans trader for market abuse
FCA has fined and banned a former market making trader for market abuse. Adrian Horn, formerly of Stifel Nicolaus Europe Limited executed trades with himself in a series of 129 wash trades in a particular security over...
EBA publishes ML risk opinion
EBA has published its biennial opinion on the ML and TF risks affecting the EU financial sector. The risks cover those of the whole sector as well as parts of it, and cover risks previously identified as well as new...
Sign up now: what’s new in financial crime prevention 10 March
In a change from the normal, we are hosting the first quarterly update of 2021 for MLROs.com. Sign up here and see you at 9:00 on 10 March.
FCA publishes details of STORs
FCA has published the number of STORs it received in 2020. There was a small dip at the beginning of the pandemic, but the amounts increased as the year went on, peaking at 421 in October, with a total of 3553 for the...
EBA revises guidelines on AML/CFT risk factors
EBA has published updated guidelines on money laundering and terrorist financing risk factors under MLD4. The changes: take account of legislative change; address new risks; strengthen the risk based approach; specify...
LSB sets roadmap for CRM Code review
LSB has published its planned activities for 2021 including updates on the wording of the CRM Bode and a call for input. Separate to its original plans it is already working on a review of the provision on its approach...
Home Office launches Modern Slavery statement registry
The Home Office has updated its guidance page on modern slavery statements following the launch of its new voluntary registry. The registry launched on 23 February, but the page was not active at the time we checked...
FATF publishes plenary outcome
FATF has published the outcome of its February plenary meeting. it approved new guidance on risk-based supervision; it will update its guidance on virtual assets and VASPs; it has agreed new guidance on proliferation...
Treasury and FCA discuss perimeter report
Treasury and FCA have met to discuss the September 2020 report on the regulatory perimeter. Discussions focused on: high risk investments and the potential need to review the current exemptions that allow marketing to...
UK Finance publishes sanctions SI analysis
UK Finance has published a detailed study of the differences between the current UK statutory instruments relating to financial sanctions and their pre-Brexit equivalents. It has conducted a comparison to assess the...
CPI 2020 shows mixed results
Transparency International has published the 2020 CPI, which shows that most countries have made little to no progress in tacking corruption over the past 10 years, but also that more than two-thirds score below 50 on...
LSB publishes CRM Code review
The LSB has published its review into the CRM Code for APP scams. The review of the voluntary code looked to see how effective it has been in providing greater consumer protection, and to see whether it has had an...
NCA publishes SARs reporter booklet
NCA has published a booklet summarising feedback from law enforcement agencies on their use of SARs, which it hopes will be informative in sharing perspectives on the use of SARs and sharing and encouraging best...
FS industry urged to improve on modern slavery practices
A report published by the Independent Anti-Slavery Commissioner says financial services sector firms have low awareness of the risks of modern slavery within their businesses. It found a general low awareness of the...
TAFA report shows little action
Treasury has published the quarterly report on activity under the Terrorist Asset Freezing etc Act 2010. The report covers the quarter to end of September 2020, and shows only £108,000 frozen in 47 accounts, and two...
Quincecare Duty is limited to agents of the customer and does not extend to individual customers
In a decision that will be welcomed by the banking industry, the High Court in the case of Philipp v Barclays Bank UK plc [2021] EWHC 10 (Comm) has confirmed that the “Quincecare Duty” placed upon banks is...
PRA consults on depositor protection I/D verification
PRA is consulting on new rules aimed at avoiding FSCS eligibility issues arising if a firm has failed to conduct adequate AML checks. It stresses the changes are intended merely to provide a backstop if firms’...
JMLSG signposts Brexit effects
JMLSG has noted the parts of its guidance affected by Brexit. In particular: EEA countries are now third countries; the same level of information is to be provided by UK PSPs regardless of whether funds are being...
FS Bill finishes Commons stages
The Financial Services Bill has now completed its journey through the House of Commons and now moves to the House of Lords. Among the key changes now being debated are extensions to penalties for financial crime-related...
HMRC updates on MLR non-compliance
HMRC has updated its published data on businesses that do not comply with the MLRs. Between February and September 2020 it issued 4 substantial fines for failure to comply with obligations, including a fine of nearly...
FCA Covid financial crime guidance to expire
FCA has updated its pages giving guidance to firms on how to act during the pandemic. As part of this, it has noted that its statement on how firms should apply financial crime systems and controls will no longer apply...
Reminder: changes to MLRs
Various amendments to the MLRs were made in the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations. Some are already in force, with others yet to take effect some of the changes were minor...
Parliament publishes corporate criminal liability briefing
The Commons Library has published a research paper on corporate criminal liabilityr. It looks at the circumstances in which corporates can commit crimes in England and Wales and sets out reform options. The paper...
Court of Appeal upholds insider dealing convictions
FCA has announced the Court of Appeal’s decision in the case it brought against Fabiana Abdel-Malek and Walid Choucair. The individuals had been convicted of five offences each of insider dealing in 2013/14 and...
TAFA report shows little movement
Treasury has published its quarterly report on the functioning of TAFA, covering April to June 2020. The report shows that: total funds of £9,000 were frozen with 6 accounts or payments being frozen, but no new...
UK publishes 2020 NRA
Treasury and the Home Office have published the 2020 National Risk Assessment under the MLRs and presented it to Parliament. The report: looks at what has been done in recent years, including in terms of bringing new...
FCA sets up temporary regime for crypto firms
FCA has set up a temporary registration regime for cryptoasset businesses who have applied for registration with FCA under the MLRs but whose applications FCA is still considering. It is taking FCA longer than hoped to...
EBA pleased at AML college cooperation
EBA has published a report analysing how well AML/CFT supervisory colleges are working. It is pleased that regulators are putting significant effort into setting up colleges, and has reported on good and poor practice...
Treasury makes Brexit financial crime laws
Treasury has made: the Sanctions Regulations (EU Exit) (Commencement) Regulations 2020: these bring into force the sanctions regulations made under SAMLA to set up thematic or country based regimes; and the second...
FCA fines and bans individual for market abuse
FCA has fined a former portfolio manager, partner and CIO £100,00 and banned him as a result of market abuse. Corrado Abbattista worked for Fenicial Capital Management LLP. FCA found he had created a false and...
Treasury makes Misappropriation Sanctions Regulations
Treasury has made the Misappropriation (Sanctions)(EU Exit) Regulations under SAMLA. The purpose is to revoke a number of EU regimes covering misappropriation of State funds, which were specific to a particular...
APP CRM Code interim funding to continue to June 2021
UK Finance has confirmed that 7 signatories to the APP CRM Code have agreed to extend the interim funding to compensate victims of scams until the end of June 2021. The funding will apply where the customer and the...
Commission to remove Mongolia from high risk list
The European Commission has published a draft regulation to remove Mongolia from the MLD4 high risk third country list. Once published in the Official Journal, the change will be effective after 20 days.
EPC Report on Payment Threats and Fraud Trends
The European Payments Council (EPC) has published its report on payment threats and fraud trend for 2020. The report attempts to create awareness amongst stakeholders involved in the payments domain to allow them to...
Angie BamboulisOFSI says “prepare for Brexit”
OFSI’s latest blog alerts firms to the changes they will see at the end of the transition period. It notes that: SAMLA provides the UK’s autonomous legal framework for its sanctions regime the FCDO has...
FATF consults on enhancing cross-border payments
FATF is consulting on how the challenges of cross border payments – namely high cost, low speed, limited access and limited transparency – can best be addressed. The survey builds on the G20 commitment to...
UK publishes retained Blocking Regulation
The DIT has published an information page on the UK Protection of Trading Interests Legislation, which includes the UK retained version of the EU blocking statute. The laws continue to protect UK persons who trade with...
NCA gets record SARs
NCA’s 2020 SARs report shows a 20% increase on the previous period and a total of 573,000 SARs. Of these, nearly 62,500 were DSARs – an increase of 81% on the previous period. NCA also reports £172m as the...
Memo of Understanding: FSCS and SFO
A memorandum of understanding between the Serious Fraud Office and the FSCS has been published. The MoU sets out the parties’ intentions to work together in the public interest to achieve appropriate outcomes in...
Jonny WilliamsEBA reminds firms to finalise Brexit plans
EBA has reminded firms that, from the end of the transition period, UK firms can no longer provide services to EU customers on a passporting basis. It notes that: UK financial institutions offering services to EU...
UK Finance reports on post-Brexit sanctions SIs
UK Finance has published the results of a study it has carried out in relation to UK Sanctions statutory instruments, as they will look at the end of the transition period, to assess what differences there will be from...
EBA publishes SREP expectations on TF/ML risks
EBA has published its Opinion in which it sets out how prudential supervisors should consider ML/TF risks as part of the SREP process. The Opinion is another expression of EBA’s exhortation on supervisors to...
Law Commission to examine identification doctrine for economic crime
The Government has published its response on the call for evidence on corporate liability for economic crime. The response summarises the work done to date, and the key reform options of: law to replace common law...
SFO publishes Airline Services DPA
SFO has entered into a DPA with Airline Services Limited, following an investigation into failure to prevent bribery. SFO reports that, under the terms of the DPA, the company accepts responsibility for three counts of...
FATF updates statements
FATF held a plenary meeting on 21-23 October. Many initiatives are on hold while FATF warns firms about the financial crime risks the pandemic has created, but it has continued to work with countries under increased...
FATF updates recommendations
FATF has updated its recommendations in respect of: Recommendation 1 and its interpretative note, to broaden the existing requirement specifically to require relevant entities to identify and assess the risks of...
SFO publishes DPA guidance
The SFO has published a chapter from its handbook that gives guidance on how it approaches DPAs and engages with companies when it is considering a DPA. The guidance, which is internal guidance for SFO staff and...
Treasury Committee launches new Economic Crime inquiry
The Treasury Committee has launched a new inquiry to look at what progress has been made in combatting economic crime, building on previous recent inquiries, It will focus on: AML systems and the sanctions regime...
FCA and PRA fine GSI for 1MDB risk management failures
FCA and PRA have fined Goldman Sachs International a total of £96.1m for risk management failures connected to its role in three fund raising transactions for 1Malaysia Development Berhad, a Malaysian state-owned...
Financial Services Bill starts Parliamentary passage
The Financial Services Bill was introduced into Parliament on 21 October. The key aims of the Bill are: to implement the remaining Basel 3 standards; to create a more proportionate investment firms’ prudential...
MLR Bank Account Portal not yet ready
FCA has confirmed that the Bank Account Portal, which is being set up under the MLRs to enable credit institutions and providers of safe custody services to respond to requests for information from a law enforcement...
FCA: new webpages on whistleblowing
The FCA has launched two new webpages on whistleblowing. The first webpage sets out the process for reporting concerns of wrongdoing to the FCA in confidence and provides guidance on: Making the decision to speak to the...
Commission publishes EU work programme 2021
The European Commission has announced its focus for 2021. As well as continuing to work on managing the effects of the pandemic, its priorities will include: a “Fit for 55” packages to reduce emissions by...
FSB issues final report on CIRR toolkit
The Financial Stability Board (FSB) has published its final report on a toolkit of effective practices for financial institutions’ cyber incident response and recovery (CIRR). The toolkit aims to assist financial...
HMRC publishes MLR risk assessment guidance
HMRC has published risk assessment information to help businesses carry out the money laundering and terrorist financing risk assessment required under the MLRs. There are separate documents for each of: money services...
FSB reports on global stablecoins
The Financial Stability Board (FSB) has published its finalised high-level recommendations for the regulation, supervision and oversight of “global stablecoin” (GSC) arrangements. The report says that GSC...
SFO looks to future challenges
Lisa Osofsky has spoken on future challenges in economic crime. She focused on: the success of the National Economic Crime Centre in its first 2 years of existence; the refreshed Economic Crime Plan; better engagement...
FCA speaks on market abuse in the time of COVID-19
Julia Hoggett has spoken on the importance of regulators maintaining focus on ensuring markets work well for consumers and are orderly and clean, whatever the challenges. She spoke about how FCA aims to place the...
OFSI publishes annual review
OFSI has published its annual review for the year to March 2020. The review highlights: OFSI’s work to prepare for the end of the transition period; its work on reported breaches and how it decides on the...
FCA opens 2 sandbox windows
FCA has opened two new application windows in its Sandbox – applications for Cohort 7 of the now established regulatory sandbox, and the pilot of a new Digital Sandbox. The emphasis is on firms providing products...
FGC updated for MLR changes
The Financial Crime Guide has been updated to reflect necessary changes consequent on implementation of MLD5. In particular, it now covers new high-risk factor considerations; changed e-money thresholds for CDD; updated...
OFSI publishes quarterly TAFA report
OFSI has published its quarterly report on the operation of TAFA, covering the quarter to end March 2020. At the end of the quarter, just over £100,000 were frozen, but mainly relating to the EU Al-Qaida Regulation...
EU updates on AML initiatives
Valdis Dombrovskis has spoken on financial crime prevention and, in particular on the AML action plan. He is pleased at the support the plan received, and the overwhelming agreement that no action is not an option. They...
FCA reports on regulatory perimeter
FCA has published its second report on the regulatory perimeter. The report looks at: consumer confusion about the perimeter – and when FCA has the power to act. It also notes that customers may be confused as to...
EU proposes crypto-asset market Regulation
The EU has published a proposal for a Regulation on markets in crypto-assets, as part of its Digital Finance package. The proposal notes many Member States have legislated on issues relating to crypto-assets which has...
Treasury Committee seeks economic crime answers
The Treasury Committee has written to BEIS, FCA, HMRC and the Minister for Security seeking answer to a number of questions in the light of the release of the FinCEN papers. Mel Stride’s letter asks: what needs...
FCA sets out views on cannabis-related businesses
FCA has set out its views on how it is assessing applications for listing from cannabis-related companies. It notes that, although medicinal cannabis has been legalised in the UK, there is a risk that the proceeds from...
Commission reports on MLD4 trust identification
The Commission has reported to the Council on whether Member States have identified trusts and similar arrangements and made them subject to the provisions of MLD4. It notes that 3 lists have been published, and from...
FATF reports on red flag indicators in virtual assets
FATF has published a report on virtual assets red flag indicators of money laundering and terrorist financing. The report focuses on: technological features that increase anonymity; geographical risks; transaction...
FCA and PSR publish annual reports
FCA has published its annual report and accounts for 2019/20. The report notes FCa’s key achievements for the year. Apart from the obvious measures to address the problems caused by Covid-19, it highlights:...
EBA calls for single AML rulebook
EBA has published its response to the European Commission’s call for advice on how to strengthen the AML/CFT legal framework. It feels the only way to tackle vulnerabilities that come from divergent practices...
FCA censures individual for market abuse
FCA has publicly censured the former CEO of Worldspreads and banned him from any roles linked to regulated activity, as as result of market abuse. It originally fined Conor Foley around £650,000 but imposed a public...
SFO updates on enforcement activities
Lisa Osofsky has spoken on SFO’s most recent enforcement activity and its priorities for the future. She spoke about how SFO has worked on its priorities of better cooperation, use of technology, intelligence...
FCA reminds firms of market abuse investigation protocol
In its latest edition of Market Watch, FCA focuses on how market participants should act when they receive information requests from FCA when it is investigating possible market abuse. It stresses that: if firms handle...
OFSI publishes frozen asset report form
OFSI has published the form on which firms need to make their 2020 frozen assets report. It requires information from relevant firms by 16 October.
FMLC responds on AML action plan
FMLC has responded to the Commission’s consultation on its AML action plan. The response focuses on: the scope of EU AML legislation on virtual currencies, and how it might be helpful to broaden the definition;...
FCA consults on extension of fin crime reporting
FCA is consulting on the possible extension of its annual financial crime reporting obligation. It wants to include firms that carry on activities that potentially pose a higher money laundering risk. FCA currently...
Court says Treasury should tell whereabouts of frozen assets
A consortium of reinsurers had tried, unsuccessfully, to trace funds owned by the Syrian state and its agents. The funds are frozen as a result of sanctions, and if the reinsurers could locate them, they would ask the...
HMRC publishes list of MLR miscreants
HMRC has published its list of businesses who, over the past tax year, have not complied with their obligations under the MLRs. Over the period, there were 15 “major” penalties, including a fine of nearly...
EBA responds to the Commission’s AML/CFT Action Plan
The European Banking Authority (“EBA“) has published its response to the European Commission’s Action Plan for a comprehensive Union policy on preventing money laundering and terrorism financing. The Action...
Amelia GreenTreasury approves JMLSG Guidance on pooled client accounts and cryptoasset exchange providers
The Joint Money Laundering Steering Group (“JMLSG“) has received HM Treasury ministerial approval for its guidance material published in June/July this year. This includes the new Sector 22 Cryptoasset...
Wolfsberg updates on effective AML programmes
The Wolfsberg Group has published a statement on steps financial institutions can take to evolve their AML./CTF regimes to meet the key elements of the Wolfsberg effective programme. It outlines the key steps as: assess...
Wolfsberg Group publishes SOW and SOF FAQs
The Wolfsberg Group has published FAQs on how Financial Institutions can identify, mitigate and manage money laundering risks by undertaking Source of Wealth and Source of Funds checks on relevant customers, when...
Treasury publishes annual AML/CFT supervision report
Treasury has published the annual report for AML and CFT for 2018-19. The report looks at the work done on supervisory activities and on promoting and ensuring compliance. There is a section devoted to the FATF key...
Up next from FCA
FCA’s latest Policy Development Update heralds: consultation on financial crime reporting during Q3; PS on debt advice levy rates in Q4; CP on exit fees in investment platforms and comparable firms during 2021; PS...
PSR focuses on APP scams
The PSR has stressed the importance of the CRM Code in reimbursing victims of APP scams. It notes the Covid-19 pandemic has changed the way many people make payments, and left many of them vulnerable to fraud. The Code...