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Summer call to action A reminder that anti-money laundering compliance is an ongoing process, and it is important to stay vigilant of the evolving approaches of regulators. The current trends in AML compliance are discussed in our Insight for financial services firms. Firms should also take note of our Insight on a recent Court of Appeal judgment involving money laundering in international supply chains. The general election has delayed the implementation of the new failure to prevent fraud offences introduced in the Economic Crime and Corporate Transparency Act 2023 (see our previous Regulatory Outlook). It is possible that the prescribed statutory guidance will be published before Parliament adjourns for summer recess, but we now anticipate that there may be a longer implementation period, in which case the offence may be unlikely to take effect before the summer of 2025. We will provide updates as soon as further information is known. The extension of the senior managers regime to attribute corporate criminal liability to all crimes has been similarly delayed after the Criminal Justice Bill failed to make it through the wash-up period. However, we anticipate that the expansion of the senior managers regime to include all crimes is likely to be included in a future bill. |
FCA speech on tackling financial crime
The Financial Conduct Authority's (FCA) Joint Executive Director of Enforcement and Market Oversight, Steve Smart, delivered a speech at the Financial Services Investigations and Enforcement Summit on the FCA's approach to financial crime.
The speech outlines the FCA's strategic priorities and how it intends to streamline its enforcement activity, in particular as part of its commitment to combat the increase in authorised push payment (APP) and investment fraud and tackle money laundering.
Increasing transparency
In February 2024, the FCA issued a consultation paper outlining its proposed new approach to publicising enforcement investigations from an early stage.
In response to the widespread concerns from industry bodies and market participants (see our response) over the proposals, Mr Smart has confirmed that each investigation would be considered on a case-by-case basis, and that there would be no presumption of publication.
Increasing the pace of investigations
The FCA will focus on increasing the pace of investigations, to improve the deterrent effect of its enforcement action. To achieve this, the FCA will, among other things, focus its resources on a streamlined caseload of investigations which are aligned with its strategic priorities of putting consumer needs first, as well as investigating and mitigating market abuse and financial crime.
For more on the key anti-money laundering (AML) issues facing financial services firms, see our Insight from our recent AML in financial services roundtable.
Financial Action Task Force
Targeted update on implementation of FATF standards on Vas and VASPs
On 9 July 2024, the Financial Action Task Force (FATF) published a targeted update on implementation of its global standards on AML and counter-terrorist financing (CFT) to apply to virtual assets (VAs) and virtual asset service providers (VASPs).
In particular, the report notes that jurisdictions have not made sufficient progress in implementing recommendation 16 (travel rule) which is a key AML/CFT measure.
The FATF urges jurisdictions to implement the relevant FATF standards on VAs and VASPs to ensure the sector does not remain vulnerable to misuse. The FATF will continue to engage with member countries, the global network, technical assistance providers and the private sector to monitor risks and market developments in this sector.
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