The wholesale banking, retail banking and wealth management sectors in the UK remain vulnerable to financial crime and pose the greatest money laundering risk based on sector risk assessments by the country’s Financial Conduct Authority (FCA).
According to the UK treasury’s Anti-money laundering and counterterrorist financing: Supervision Report 2019-20 published at the end of November, the FCA committed to further enhancing its supervision and engagement with these sectors in line with the Economic Crime Plan 2019-22 (ECP) in an approach consisting of three main proactive programme categories.
Large banks
The Systematic Anti Money Laundering Programme covers the 14 largest retail and investment banks operating in the UK. They are subject to the most intensive anti-money laundering and counter financing of terrorism supervision.
Given the high risk they present, the FCA’s engagement with these firms is continuous and each has a dedicated frontline supervision team.
Smaller firms
The Proactive Money Laundering Programme focuses predominantly on smaller firms assessed as higher risk and covers about 30 firms per year.
Depending on risk levels, firms move in and out of the programme and a data return is used to determine if they are in scope. This aims to ensure that the FCA assesses the firms posing the greatest money laundering risk.
The Risk Assurance Programme involves firms from within the remaining FCA’s supervised population.
ECP scope
Last year the UK government said it would introduce a levy to be paid by certain firms subject to money laundering regulations, including banks, accountants, estate agents and solicitors to tackle money laundering and ensure delivery of the reforms committed to in the ECP (Trade-based Financial Crime, 1 May 2020).
The ECP outlines actions being taken by the public and private sectors to curb economic crime and specifically contemplates trade-based money laundering.
The UK treasury’s Anti-money laundering and counterterrorist financing: Supervision Report 2019-20 can be found here.
The Economic Crime Plan 2019-22 can be found here.
Categories: Trade Based Financial crimes News
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