The FCA has fined Canara Bank £896,100 and restricted it from accepting deposits from any new customers for a period of 147 days as a result of anti-money laundering failings. Firms should be aware that the FCA is active in this area and ensure that their AML processes comply with the relevant regulatory and legal requirements.
As revealed in a Final Notice published by the FCA yesterday (6 June 2018) the FCA visited Canara Bank in 2012 and 2013 as part of a Thematic Project and then again in 2015 before appointing a skilled person to conduct an assessment of AML and financial sanctions systems and controls and other matters. This assessment has resulted in these sanctions being imposed, in particular for failing to take reasonable care to manage AML risks and compliance in accordance with regulatory requirements.
This is an interesting development from which we can take away key lessons about the FCA's evolving approach to financial crime:
- financial crime is increasingly becoming the centre of the FCA's attention, including AML issues. Markets abuse and financial crime together constituted more than half the investigations opened by the FCA for the 2016/2017 financial year;
- any weaknesses or inadequacies in firms that are identified by the FCA as a result of visits or otherwise must be addressed and remediated in full by those firms in accordance with any recommendations or guidance provided by the FCA;
- the passage of time should not be taken as a sign of security, years can elapse between the FCA taking an interest in an institution and issuing a fine or other sanction; and
- the FCA is looking to use more creative sanctions than just monetary fines. In the Final Notice the FCA specifically states that the non-financial penalty "will be a more effective and persuasive deterrent than a financial penalty alone".
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 came into force on 26 June 2017. Firms should ensure that they are fully compliant with its requirements and are properly handling the risk of financial crime.