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FCA drops half of current investigations into AML breaches

By Elizabeth Hearst

The United Kingdom’s Financial Conduct Authority (FCA) has terminated half of the criminal investigations into infringements of existing money laundering regulations since the beginning of 2020. 

A report by the Financial Times details how seven out of a total 14 criminal investigations instigated by the financial regulator have been thrown out. This comes despite pledges from the FCA that it would make full use of its powers. 

Five of the seven discontinued investigations were classified as “single track” or wholly criminal probes, while the remaining two investigations were deemed “dual track” as they could have resulted in either criminal or civil proceedings. 

The seven remaining active investigations that the FCA are pursuing are mostly dual track with only one investigation earmarked as criminal-only. 

Under the existing 2017 legislation, the FCA are yet to bring a criminal prosecution, something that is a far cry from the body’s pledge to crack down on financial crime. In 2018, the UK set up OPBAS (Office for Professional Body for Anti-Money Laundering Supervision) in an attempt to bolster its efforts with the FCA. 

In a speech in March 2019, Alison Barker, Director of Specialised Supervision at the FCA called for additional requirements for higher standards of supervision in professional bodies and stressed the need for increased intelligence sharing when it comes to money laundering and said: “There has not been enough intelligence sharing. Why does intelligence sharing matter? We can all be better informed and better targeted. Together we can disrupt and stop criminal activity.”

Although the FCA have indicated that they are serious about money laundering, the body has only ever imposed fines on offenders. This is in spite of its ability to issue criminal proceedings for failures in anti-money laundering legislation. 

According to the FCA’s annual report issued last week, the body imposed 15 financial penalties in 2019, amounting to £224 Million in fines. A spokesperson for the FCA told the FT that the body only brought prosecutions “in the most egregious cases”, and aimed to implement financial penalties in all other cases. 

The spokesperson added: “The FCA has changed its approach so that it is now conducting investigations into suspected breaches of the money laundering regulations that might give rise to either criminal or civil proceedings… The FCA’s approach is to make inquiries and assess the full nature of the matter under investigation before deciding on the most appropriate outcome.”

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