Nicola Sharp of financial crime specialists Rahman Ravelli summarises the situation.
Barclays Bank is being investigated by the Financial Conduct Authority (FCA) for suspected failings in its compliance and anti-money laundering (AML) systems.
The UK regulator requested an independent review of Barclays' internal systems under Section 166 of the Financial Services and Market Act 2000. This involves asking an independent firm of experts to review and report on Barclays' systems and provide recommendations to improve practices in line with AML regulations.
The Financial Times reported that there had been a number of incidents where the bank had failed to conduct thorough know your customer (KYC) and AML checks. Although the incidents are said to be minor, the FCA is concerned about the collective number of failings by the bank. These checks are not only a legal requirement but are also fundamental to tackling financial crime and the movement of illicit funds.
While the current FCA review is being conducted by its supervisory arm, any failure by Barclays to show improvements in its AML and compliance systems could lead to the FCA taking enforcement action.
The FCA is trying to do all it can crack down on regulatory failings in the UK. Under the Money Laundering Regulations, institutions must have systems in place to stop suspected money laundering. In December 2021, NatWest was fined £265 million after it pleaded guilty to three counts of failing to properly monitor £365 million deposited into the account of a Bradford jeweller, Fowler Oldfield.
The FCA had alleged that NatWest committed offences under the Money Laundering Regulations 2007 by failing to adequately monitor customer accounts between the period of 2011 to 2016.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.