Preventing financial crime remains a priority area for regulators globally as it is fundamental to protecting both consumers and the integrity of the global financial system. The AML regulatory regime differs in each jurisdiction and firms will have to make sure they have the appropriate processes and controls in place to ensure they remain fully compliant.
On 10 July 2014, the FCA published its second Anti-Money Laundering Annual Report, which suggests that compliance with anti-money laundering, Know Your Customer (KYC) and sanctions continues to be on the top of the FCA’s agenda, and in 2014/2015 the FCA will continue its Systematic Anti-Money Laundering Program (SAMLP) assessments of major banks.
At present, the FCA conducts ‘deep dive’ assessments of four banks each year. In addition, the FCA is planning on extending its review to some smaller firms that might present high levels of money laundering risk, as well as carrying out focused thematic work.
AML has always been a focus of the Jersey Financial Services Commission (“JFSC”) and following the evaluation by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (“MONEYVAL”) in 2013, a consultation paper has been issued with proposals to amend the Money Laundering (Jersey) Order 2008.
Client due diligence procedures, suspicious activity reporting, sanctions monitoring and a firm’s AML arrangements in general are consistently high on the agenda as part of a JFSC supervisory visit, and firms should take care to ensure they are able to evidence compliance with the AML regulations.
On 9 July 2014, the Securities and Futures Commission (“SFC”) announced that it had taken enforcement action against a securities firm in relation to deficiencies in AML controls and, in particular, policies and procedures for dealing with suspicious client transactions.
Recent establishment of the Hong Kong Monetary Authority’s Anti-Money Laundering and Financial Crime Risk unit will substantially increase a number of on-site inspections of financial firms.
Over the past year, the U.S. Regulators sent a very strong message to the financial services sector that they are committed like never before to stronger and more aggressive enforcement of the AML laws. On 30 June 2014, the US Regulators reached an $8.9bn settlement where a bank admitted to violating U.S. sanctions and AML regulations. However, the U.S. Regulators have not only been pursuing big players in the industry; we have also seen, in recent years, actions against smaller financial institutions.
How can we help?
Duff & Phelps industry knowledge and expertise has proven the difference for many clients, especially during regulatory assessments. Our global team of AML experts have strong experience in supporting firms with reviewing and establishing appropriate AML systems, process and controls which comply with various regulatory regimes, including UK, U.S. and Hong Kong.
Over the years, Duff & Phelps have provided regulatory consultancy services in the area of AML and financial sanctions to a wide range of firms such as hedge fund managers, retail wealth managers, private equity firms, institutional brokers, corporate finance advisers and European and Global banks.
We are also on the FCA Skilled Person panel for Financial Crime (Lot 7).
Our global team of experts can provide the following services:
Independent reviews of your AML approach, systems, processes and controls to help you understand your AML risks, identify gaps and focus remedial action whilst taking a pragmatic approach
Advice to ensure that AML procedures correlate with other customer due diligence requirements
Evaluation of transaction monitoring procedures and systems ensuring that duplication of regulatory effort is reduced
Undertaking a retrospective transaction monitoring review
Undertaking independent KYC assessment
Training and awareness programs to raise internal AML awareness and culture
Ensuring your AML and sanctions compliance processes meet national and international regulatory requirements
Advice on technology solutions
Undertaking a remediation projects in order to update KYC documentation