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Anti-Money Laundering: FCA criticised over lack of enforcement

The Financial Conduct Authority (FCA) has been criticised for its lack of enforcement of anti-money laundering (AML) legislation so far in 2020.

A Freedom of Information request has revealed that no criminal prosecutions have been made under AML legislation this year.

The same request also found that 14 of the FCA's investigations of possible AML breaches have been discontinued.


AML expert Martin Cheek, managing director of SmartSearch, is calling on the FCA to use the full weight of its enforcement power in the wake of the Covid-19 pandemic.

He says that due to the pandemic, there is an increasing risk of financial crime in the UK and that every effort should be made to crack down on that increased threat.

"There has of course been some welcome enforcement activity with hefty fines handed out in recent months," explains Cheek.

"However, now more than ever it would send out the right message if the FCA were to really flex its muscle and bring the full weight of [its] enforcement power to bear on offenders."

In a statement, the FCA said it has changed its approach and is now conducting investigations into suspected AML breaches which could give rise to either criminal or civil proceedings.

With less than four months to go of 2020, SmartSearch says it remains to be seen if any criminal prosecutions will be brought this year.

Cheek says the FCA must also play a key role in encouraging firms to 'move with the times' and use more secure technology to protect themselves against financial crime.

"The FCA faces a real challenge in dealing with the fallout of Covid-19 in terms of the increased levels of fraud and money-laundering, as criminals seek to take advantage of the situation," he explains.

"Unfortunately, there are still too many firms operating outdated processes that have not kept pace with the increasingly sophisticated methods employed by criminals, and they are vulnerable in this current climate."


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