The Financial Conduct Authority (FCA) has not brought a single prosecution under new tougher criminal powers to combat money laundering that were introduced in 2017, a freedom of information (FOI) request shows.
The FCA has the power under the Money Laundering Regulations 2017 to criminally prosecute a person or organisation it suspects of not putting in place sufficient safeguards against money laundering. Anyone found guilty is liable to receive a fine and up to two years’ imprisonment.
However, an FOI by law firm Hickman & Rose shows the FCA has not brought a single criminal prosecution against a firm or individual for breaching the money laundering regulations.
“There is probably action behind the scenes, but it is just so slow,” Andrew Katzen, head of regulatory at Hickman & Rose, said. “If there is meant to be a deterrent effect in those powers, how is that impacted by the delays?”
The lack of action comes despite bullish pronouncements by the FCA on its work to combat money laundering.
In its 2018/19 business plan the agency promised to use the “full range of supervision and regulatory enforcement tools [….] regulatory and criminal investigations” to combat money laundering and financial crime more generally.
In April last year, Mark Steward, the agency’s director of enforcement said: “I think it is time that we gave effect to the full intention of the Money-Laundering Regulations which provides for criminal prosecutions.”
The FCA said it had interviewed two people under caution and was investigating three people in connection with suspected criminal breaches of the regulations
It said it is currently running four dual track criminal/ civil investigations into money laundering – one into an individual and three into firms.
It is understood the FCA is also investigating criminal and civil money laundering offences that took place before the introduction of the regulations in 2017.
“The problem is that in making so many public pronouncements about the importance of these powers, if you then aren’t seen to activate them then it may inadvertently send the wrong message,” Katzen said.