Martin Schofield's blog

UK and EU are to sign a financial services agreement….

On 27th June 2023 the UK Treasury announced that whilst the Chancellor of the Exchequer, Jeremy Hunt, was in Brussels at the end of June (2023) he is expected to sign an agreement with the EU on financial services.

A Memorandum of Understanding (MoU) is be drawn up and signed, setting out plans for the UK and EU to cooperate on matters such as information sharing, working together towards meeting joint challenges and coordinating where appropriate on issues ahead of G7, G20 and other international meetings.

National Crime Agency Issues Guidance on Submitting Better Quality SARs – June 2023

In case you missed it, the NCA has recently issued some guidance on submitting better quality SARs. A must read for the MLRO/Nominated Officer and their teams.

Further new amendments to the much-awaited final version of the Economic Crime and Transparency Bill (the Bill)

The Government’s April 2023 amendment to the Bill, introducing a “failure to prevent fraud” offence, which will if unchallenged, make an organisation liable if it does not have reasonable procedures1 in place to prevent fraud, where a [specific] fraud offence is committed by an employee or agent, which results in, or is intended to result in a benefit for the organisation.

Failure to Prevent Fraud Offence – Will it have the teeth it was born with?

According to Gov.UK, fraud is the most common offence committed in the UK, amounting to 41% of all crime reported in the year ending September 2022 (Factsheet: failure to prevent fraud offence - GOV.UK (www.gov.uk). There is little doubt that instances of fraud have increased during and subsequent to the pandemic, and consequently, there has been a long-standing call for more to be done to address and prevent fraud.

New EU measures against money laundering could impact beneficial ownership screening!

In an announcement made on 28th March 2023 in the European Parliament News, ( New EU measures against money laundering and terrorist financing | News | European Parliament (europa.eu)), it was announced that on the 21st March 2023, MEP’s from the Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees, agreed to adopt their position on pieces of draft legislation of the EU’s Anti Money Laundering and Countering the Financing of Terrorism Policy.

FCA PS19/7 – The Directory

In March 2019, the FCA published “The Directory”. Following on from the Senior Manager’s regime, there is a reduced number of people within a firm that are required to be approved by the FCA and PRA, and therefore a reduced number of individuals names will appear on the Financial Services register.

Consequently, those carrying out customer function type roles such as those who provide financial advice, help with pension transfers, traders, portfolio managers and additional directors will no longer be approved by the FCA and PRA and will not appear on the register.

UK Sanctions Agency Issues First-Ever Fine Against London Bank

In February 2019, we saw the UK’s Office of Financial Sanctions Implementation (OFSI) (not to be confused with the Canadian regulator the Office of the Superintendent of Financial Institutions (OSFI) impose a £5000 fine against London based Raphaels Bank, the first fine levied by the agency since its creation in 2016.

FATF February 2019 – Jurisdictions that have strategic AML/CFT deficiencies

In February 2019, the FATF issued a list of those jurisdictions that have strategic AML/CFT deficiencies and therefore present a risk to the financial system until commitments to address the deficiencies materialise.

The listed countries are:

UK and USA TI CPI Rankings Fall – UK gets Warning

January 2019 saw the UK’s Transparency International (TI), Corruption Perception Index (CPI) score fall from 8th place to 11th this being the UK’s lowest score since it hosted the global Anti-Corruption Summit in 2016. This fall in ratings does need to be balanced however against the fact that globally 65 countries ratings fell and one of the biggest falls was the USA who fell from 16th in 2017 to its current 22nd place.

FATF Mutual Evaluation of the UK

In this assessment, adopted at the October 2018 Plenary meeting in Paris and published in December 2018, the UK was classified as having an effective regime in many respects.

However, we were also reminded that the UK is the largest financial services provider in the world and therefore we hold a significant risk that some of the funds that we handle may have links to criminal activity and/or terrorism.

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