FCA raises spectre of criminal prosecutions for AML failures

In what is likely to send a shudder down the backs of gambling operators fearful that the Gambling Commission might adopt a similar view, Mark Steward, Director of Enforcement and Market Oversight at the FCA, has recently delivered a speech in which he suggested “it is time that we gave effect to the full intention of the Money-Laundering Regulations which provides for criminal prosecutions”. 

He went on to say:

In making poor AML systems and controls potentially a criminal offence, the MLRs are signalling that, in egregious circumstances, MLR failures let down the whole community and in this sense, they may constitute:

‘…a breach and violation of public rights and duties which affect the whole community, considered as a community; and are distinguished by the harsher appellation of crimes and misdemeanours.’ (Commentaries on the Laws of England (1765-69), William Blackstone.)

This does not mean every investigation where we think there is a case to answer will or should be prosecuted in this way. I suspect criminal prosecutions, as opposed to civil or regulatory action, will be exceptional. However, we need to enliven the jurisdiction if we want to ensure it is not a white elephant and that is what we intend to do where we find strong evidence of egregiously poor systems and controls and what looks like actual money-laundering.

Mr Steward’s speech can be downloaded below. Readers may also be interested in the additional comments within his speech about:

  • the FCA’s “partly contested case process”, introduced in 2017, and
  • the level of fines (totalling £76,816,800) recently imposed by the FCA on Tesco Bank, Santander and UBS for regulatory failings.