UK Parliament
Anti-money laundering - Treasury Committee publishes letter to FCA on NatWest plc prosecution - 20 October 2021
The House of Commons Treasury Committee has published a letter from its Chair, Mel Stride MP, to the FCA’s Chief Executive, Nikhil Rathi, seeking further detail about the FCA’s prosecution of NatWest plc under the Money Laundering Regulations 2007 (MLR 2007).
Mr Stride states that, although the Committee is pleased with the result of the prosecution, it is interested in better understanding why the FCA only brought criminal proceedings against the NatWest Bank five years after the police raid which uncovered money laundering activities at one of NatWest Bank’s customers. The letter sets out a number of questions:
- When was the FCA made aware of the money laundering implications of the police raid in 2016, and by whom?
- Was the FCA notified by the National Crime Agency (NCA) or another police agency and when?
- After the FCA was made aware, when was the decision taken to appoint investigators and then prosecute NatWest Bank?
- What interactions does the FCA have with the NCA and other police forces about cases such as this, where police action identifies that a regulated firm may be failing to prevent money laundering within its business?
- Why did the FCA decide not to prosecute NatWest individuals in this case?
The letter requests a response to the questions by 25 October 2021.
Treasury Committee: Letter to FCA: Prosecution of NatWest Bank for money laundering
Press release
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Compensation (London Capital & Finance plc and Fraud Compensation Fund) Act 2021 - 21 October 2021
The Compensation (London Capital & Finance plc and Fraud Compensation Fund) Act 2021 has received royal assent. The Act provides for the establishment of a compensation scheme for London Capital & Finance (LC&F) bondholders.
LC&F entered into administration in January 2019, at which point it had over 11,000 investors who had invested £237 million in total. The majority of LC&F’s investors were ineligible for compensation from the Financial Services Compensation Scheme as the issuance of certain of LC&F’s non-transferable debt securities, known as “minibonds”, was not a regulated activity. Following Dame Gloster’s report into the FCA’s regulation of LC&F, the Economic Secretary, John Glen, announced in December 2020 that the exceptional circumstances of the case warranted the establishment of a compensation scheme.
The Act also amends the Pensions Act 2004 to allow the Secretary of State to make a loan to the Board of the Pension Protection Fund and for that loan to form part of the funds of the Fraud Compensation Fund. This was in consequence of the decision in Board of the Pension Protection Fund v Dalriada Trustees Ltd [2020] EWHC 2960 (Ch.). The High Court in Dalriada Trustees confirmed that members of certain types of scam pension schemes relating to pensions liberation are eligible for compensation from the Fraud Compensation Fund.
Compensation (London Capital & Finance plc and Fraud Compensation Fund) Act 2021
https://www.legislation.gov.uk/ukpga/2021/29/pdfs/ukpga_20210029_en.pdf
Webpage
Financial Conduct Authority
Financial crime due diligence failings - FCA publishes final notice on Credit Suisse - 20 October 2021
The FCA has published a final notice imposing a fine of £147,190,200 on Credit Suisse (the Bank) for serious financial crime due diligence failings related to loans worth over USD1.3 billion, which the bank arranged for the Republic of Mozambique over the period October 2012 to March 2016.
The FCA found that the Bank breached Principle 2 of the FCA’s Principles for Businesses (failure to conduct its business with due skill, care and diligence), Principle 3 (failure to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems); and SYSC 6.1.1.R (failure to establish, implement and maintain adequate policies and procedures sufficient to ensure compliance by the Bank, including its managers and employees, with its obligations under the regulatory system and for countering the risk the Bank might be used to further financial crime).
In setting the fine, the FCA took into account Credit Suisse’s undertaking to forgive USD200 million of debt owed by the Republic of Mozambique. Credit Suisse also agreed to resolve the case with the FCA, qualifying it for a 30% discount in the overall penalty. Without these aspects, the financial penalty would have been significantly greater.
The FCA fine is part of an approximate USD475 million global resolution agreement involving the US Department of Justice, the US Securities and Exchange Commission, and the Swiss Financial Market Supervisory Authority (FINMA).
Final Notice: Credit Suisse International, Credit Suisse Securities (Europe) Ltd, and Credit Suisse AG
Press release
