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UK’s Financial Conduct Authority rebukes retail banks on anti-money laundering failings

David Geale, FCA director of retail banking and payments supervision, has ordered retail banks which to provide evidence of gap analysis in their AML procedures by September.

Napier AI
July 23, 2021

UK’s Financial Conduct Authority rebukes retail banks on anti-money laundering failings

The UK’s Financial Conduct Authority (FCA) circulated a letter to retail banking industry heads in the economic region in May, which has just recently been available in the public domain. Although the letter cited areas of successful control protocols, it noted ongoing inefficiencies in the areas of governance and oversight, risk assessment, client due diligence, transaction monitoring and suspicious activity reporting.

The letter further noted that ‘persistent failings’ of adherence to anti-money laundering regulations had resulted in intervention of regulators in the form of requiring institutions to appoint consultants to carry out in-depth reviews, restrictions on trade, and direct enforcement action.

The FCA director of retail banking and payments supervision, Mr David Geale, who scripted the letter, highlighted that inadequate control measures in the high-risk retail banking sector make it vulnerable to criminals seeking to launder illicit funds or commit other financial crimes.

He further recommended that role players in the sector undertake a gap analysis of their anti-money laundering procedures and be able to provide evidence of action steps taken by 17 September 2021.

Read more on this story in The Fintech Times.

European Union proposes new plan to combat anonymous money laundering via cryptocurrencies

The European Commission has set out an agenda aimed at enhancing the combatting of money laundering and the financing of terrorism. Central to the proposed upgrades of the current regimen in the economic region are terminating anonymity for cryptocurrency traders and establishing a new agency to focus specifically on money laundering.

The proposals represent a bold step in the EU’s ongoing fight against financial crime. Europol estimates that EUR 715 (£613) billion at least of established global GDP is laundered each year globally, with Europe contributing significantly to that total. The suggested enhancements include aligning the whole crypto-currency sector with beneficial ownership declarations required of conventional financial institutions, and establishing a singular entity focussed specifically on combatting money laundering with a focus on cross-border co-operation amongst member states.

European commissioner in charge of financial services, Ms Maireád McGuinness, emphasised the thrust of the proposals by noting that “when we talk about money laundering, we neglect to talk about the rotten crimes that are where this money comes from, whether it’s child prostitution or drug abuse.”

Read more on this story in The Irish Times.

Coronavirus pandemic delays India’s anti-money laundering review

The global anti-money laundering organisation, the Financial Action Task Force (FATF), announced the covid crisis-driven decision regarding the anti-money laundering regime of the highly populated Asian State earlier this week. Included in the dossier of concerning areas for FATF are wildlife smuggling and malevolent use of smart electronic devices.

The cyclical ten-year review of the regional economic giant has been postponed twice owing to the covid-19 pandemic. A 2013 report by the FATF concluded that India has elevated its anti-money laundering regimen considerably, but challenges in the sector still remain. Indian authorities are expected to demonstrate their implementation of requisite enforcement, regulation application, and measures against tax evasion within the stipulated time frame.

Progress and challenges are now scheduled to be discussed at a FATF plenary, scheduled for an unspecified date in October, 2023.

Read more on this story in The Kashmir Reader.

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