A recent case shows the insidiousness of corruption and demonstrates the importance of taking responsibility for AML risk.

Two news stories caught my eye this week. Both serve as stark reminders of the pervasiveness of money-laundering risk and the scale of the challenge Compliance teams, regulators and criminal justice authorities face in mitigating money-laundering and illicit finance.

The first story is a success story for regulators. The FCA has fined Metro Bank PLC (Metro) ￡16,675,200 for systems and controls failures between June 2016 and December 2020. Over 60 million transactions, with a value of over ￡51 billion where inadequately monitored for money laundering risk.

In line with peers and industry best practice, Metro had implemented an automated system for monitoring transactions in mid-2016. The system did not work as Metro had intended and, in some circumstances, transactions would not be ingested and screened. Despite concerns being raised by staff, a fix was not put in place until July 2019. A means of checking whether all relevant transactions were being fed into the monitoring system was not implemented until December 2020.? ????

The second story could come straight out of a Michael Mann movie. The head of Spain’s national police financial crime unit, Oscar Sanchez Gil, was arrested after €20 million of suspected drug money was found hidden in the walls of the house he shared with his partner, also a police officer. Gil was the head of the fraud and anti-money laundering division of the national police. Authorities currently believe Gil had been corrupted many years ago. Spain remains a hub for transportation of illicit cargoes from the Americas to Europe, so the damage caused by Gil’s alleged corruption is incalculable. It will be some time before authorities can understand the impact on current and past investigations upon which Gil may have exercised influence. The breadth of criminal and money-laundering networks mean impacts will be felt across borders too. ??

So, what lessons can we as risk compliance professionals take from these stories? For me, it is a reminder of the scale of the responsibility we have, and the difficulty we face in preventing our institutions from being used for money-laundering. And the risk is so high and the impact so potentially damaging that we can never become complacent about the systems and controls we use. The integrity of the third parties we use and the authorities we liaise with cannot be taken for granted. Firms should ensure their financial crime framework and AML controls are regularly reviewed, assessed and monitored to ensure their continued effectiveness.

#RSM #AML #MoneyLaundering #corruption #FCA #FinancialCrime #NationalPolice #briberyandcorruption #NCA