Tech and Crime Series: Has the FCA bitten off more than it can chew with its NatWest Prosecution?
Thomas Cattee, 13 April 2021
News broke on Tuesday 16 March 2021 that the Financial Conduct Authority (the “FCA”) has started criminal proceedings against NatWest Bank (“NatWest”) for alleged offences relating to the adequacy of procedures in place to prevent money laundering.
These proceedings are in respect of offences under the Money Laundering Regulations 2007 (the “2007 Regulations”). It is alleged that between 11 November 2011 and 19 October 2016 NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of the 2007 Regulations.
In essence, these regulations require institutions to determine, conduct, and demonstrate risk-sensitive due diligence and ongoing monitoring of its relationships for the purposes of preventing money laundering. Under regulation 45 of the 2007 Regulations, a failure to comply with the requirement in earlier regulations can result in criminal liability.
The fact that the FCA has chosen to bring proceedings under these regulations, rather than the specific anti-money laundering legislation under the Proceeds of Crime Act 2002, suggest that the FCA has identified alleged regulatory oversights rather than an active involvement in money laundering. Albeit regulatory oversights that potentially invoke criminal liability.
