- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Neil Hodge2024-12-12T19:59:00
The U.K. will struggle to shed its reputation as one of the world’s biggest conduits for dirty money due to a combination of patchy intelligence-sharing and poorly resourced enforcement agencies, experts told Compliance Week.
Efforts to punish corporate and individual offenders for violating anti-money laundering (AML) laws are hampered by the U.K.’s dependence on a multitude of poorly resourced, ill-equipped regulators, and enforcement bodies to bring both corporate and individual offenders to book, despite having appropriate legislation and a range of sanctions in place.
Around 40 percent of the world’s total illicit funds go through the U.K. financial system each year.
“If you were designing a system of AML supervision from scratch, you would be unlikely to come up with the current regime,” said Colette Best, director of AML in the legal services regulatory team at law firm Kingsley Napley.
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London has long had the dubious reputation of being the world’s money laundering capital and it looks like it’s a title it is likely to retain for some time yet.
The U.K. Financial Conduct Authority has fined Metro Bank 16.6 million pounds (U.S. $21 million) for an alleged failure by its automated system to adequately monitor money laundering risks.
The U.K.’s Financial Conduct Authority fined Starling Bank, Britain’s first digital bank, nearly 29 million pounds (U.S. $38.5 million) for repeated failures related to onboarding high-risk customers.
The U.K. has an ongoing problem with money laundering, but recent changes to economic crime law and corporate registration requirements could bring more cases to court, according to consultancy KPMG.
Enforcement actions in the first half of of 2024 by the Treasury Department’s Financial Crimes Enforcement Network highlight the importance of proactive measures in Bank Secrecy Act compliance rather than just being compliant.
The U.K Financial Conduct Authority published findings showing that financial services firms are implementing its guidance on politically exposed persons related to anti-money laundering inconsistently, with experts warning firms of reputational damage arising from potential enforcement.
