The Financial Services Authority has identified six 'clusters' of activity which are particularly vulnerable to money laundering practices, it revealed recently. Releasing the results of the Authority's 'Money Laundering Theme: Tackling Our New Responsibilities', Carol Sargeant, Managing Director of the FSA also said that the study had found that many firms within the financial services industry could be doing a lot more to meet their obligations in the fight against money laundering.
'From 1 December, the FSA will have an explicit objective to reduce the extent to which firms we regulate can be used in connection with financial crime, including money laundering...[However] the industry has a key role to play by making sure its own house is in order and in sharing information and best practice.' The FSA's sentiments are echoed by the National Criminal Intelligence Service (NCIS), which recently revealed that although its Economic Crimes Unit had received a record 18,408 disclosures, mainly from banks, this figure represented less than 30% of the UK's 575 registered banks making any suspicious transaction reports last year.
Three of the high risk 'clusters' identified by the FSA in its report are traditional areas of concern- international banking, domestic banking, and offshore funds. There are also three relative newcomers to the Financial Services Authority's hall of shame- spread betting, online stockbroking, and credit unions. However, the FSA emphasised that the focus is on prevention rather than cure: 'Our aim is to work with the industry to help those firms that are behind the game step up a class in terms of preventing the risk of money laundering crystallising,' explained Ms Sargeant.
The Association of British Credit Unions has issued a sniffy response to the FSA's suggestion that it is vulnerable, saying that no more than £5,000 can be deposited into credit union accounts.
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