Out-Law on 31st August published an analysis which says that recent sanctions imposed by the Financial Conduct Authority (FCA) on Canara Bank show the regulator’s increasing focus on AML systems and controls.  The UK branch of the Indian bank was fined £896,100 by the FCA in June 2018 for breaching Principle 3 (taking reasonable steps to organise its affairs responsibly and effectively, with adequate risk management systems) of the FCA’s Principles for Businesses. It was also banned from accepting deposits from new customers for 147 days.  The bank failed to maintain adequate AML systems and failed to take sufficient steps to remedy weaknesses in its AML systems and controls once notified by the FCA.  The article says that the FCA has increasingly been using non-financial penalties in addition to imposing fines.  The FCA has also shown that it will hold the relevant persons responsible for the failure to report AML system weaknesses to the FCA, or to implement the relevant requirements.  Recent FCA notices found “systemic” weaknesses or failures in the banks’ AML systems and controls, and repeatedly noted that these failings were at “all levels” of the business and management; and there are repeated references to a “culture” of AML risk or failure to instil responsibility for compliance within the banks.


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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