FCA Dropped Half of Its Criminal Money Laundering Cases in 2020: FT
14 Sep 2020

The UK’s Financial Conduct Authority (FCA) has dropped half of its criminal probes into alleged violations of money laundering rules since the beginning of the year and has yet to bring a single prosecution of the crime, the Financial Times reported Monday.

Citing data obtained via a freedom of information (FOI) request, the newspaper found that, since January, the FCA has suspended seven of its 14 criminal investigations into suspected breaches of money laundering regulations, including two “dual-track” cases that could have resulted in either criminal or civil proceedings and five “single-track” probes that focused solely on criminality.

The authority is now pursuing only one single-track criminal investigation into money laundering and six dual-track cases, which could end with only civil outcomes, the FT said.

The discontinuations stand in contrast to comments made by FCA Director of Enforcement Mark Steward in April 2019 that it was time to “to [give] effect to the full intention of the money laundering regulations which provides for criminal prosecutions.”

“We need to enliven the jurisdiction if we want to ensure it is not a white elephant and that is what we intend to do,” Steward said at the time.

The law firm Eversheds Sutherland, which made the FOI request, said that a review of Ministry of Justice data shows that there have been no criminal prosecutions to date under the UK’s 2017 money laundering regulations, the FT reported. While one prosecution was brought last year under rules implemented in 2007, it was not led by the FCA, which has only ever imposed fines, the FT said.

An FCA-led prosecution of money laundering violations would benefit both the authority and the firms it regulates, Ruth Paley of Eversheds Sutherland told the news outlet.

“It is important for businesses to have certainty over what conduct will land them in court,” she told the FT. “It’s likely that the FCA is looking for a scalp. A conviction in the right case would have a considerable deterrent effect, and would also be a good PR outcome.”

“The FCA has changed its approach so that it is now conducting investigations into suspected breaches of the money laundering regulations that might give rise to either criminal or civil proceedings,” an FCA spokesperson told the FT. “The FCA’s approach is to make inquiries and assess the full nature of the matter under investigation before deciding on the most appropriate outcome.”

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