Harder safeguards to scale back the chance of cash laundering by way of the Put up Workplace have been set out by the Metropolis regulator.
The Monetary Conduct Authority stated its work has introduced collectively businesses together with the Nationwide Financial Crime Centre (NECC), banks and the Put up Workplace, to handle an recognized weak point in anti-money laundering controls referring to money deposits.
The Put up Workplace has been serving to to fill in money entry gaps for folks and companies as extra financial institution branches shut.
Beneath an settlement, many banks provide private and enterprise clients a variety of banking providers, together with money deposit providers, by the Put up Workplace.
However the NECC estimates that lots of of thousands and thousands of kilos is laundered annually by the money deposit channel on the Put up Workplace.
Whereas banks have made good progress in enhancing safeguards, there’s extra work to do, the FCA stated.
We have now labored in partnership with legislation enforcement, business and authorities to make sure folks and companies can nonetheless draw on the important money banking providers supplied by the Put up Workplace, whereas addressing gaps that criminals might abuse
Sheldon Mills, Monetary Conduct Authority
The steps set out for banks below the crackdown embrace a transfer in the direction of card-based transactions and away from paying-in slips, the place doable, to permit enhanced monitoring and scale back alternatives for deposits being made into accounts by third events.
The sharing of intelligence can even be improved below the plans, in order that data is handed on to different companies, legislation enforcement and the FCA regularly.
Employees can even be skilled to identify patterns of suspect exercise, the regulator stated.
And money deposit limits on the Put up Workplace can be decreased, topic to buyer preparations, to beneath the present restrict of £20,000 per transaction.
Some banks had positioned over-reliance on the £20,000 restrict, the FCA stated.
The restrict has been abused by criminals making a number of deposits of £20,000 every day to launder massive quantities of money rapidly.
For private accounts, the FCA has proposed a restrict of £1,000 per 24-hour interval and £10,000 per 12-month interval.
Corporations also needs to have thought of whether or not a tailor-made strategy for private clients is acceptable, the regulator stated.
For enterprise accounts, the regulator has requested banks to contemplate adopting a tailor-made strategy primarily based on anticipated enterprise buyer exercise.
Recognising that enterprise buyer profiles between banks differ, it was not applicable to set a single particular restrict or strategy however relatively to ask banks to take a data-led strategy utilizing their very own buyer data, based on the FCA.
The regulator stated Put up Workplaces are an essential a part of defending entry to money for folks and small companies – and the FCA’s analysis signifies 6% of adults within the UK used money to pay for every little thing over the 12 months from Might 2021, rising to 9% of individuals in weak circumstances.
Whereas most individuals have affordable entry to money, it is important that any cash laundering protections don’t get in the best way of official clients and companies accessing providers on the Put up Workplace, the regulator stated.
Sheldon Mills, govt director of customers and competitors on the FCA, stated: “We have now labored in partnership with legislation enforcement, business and authorities to make sure folks and companies can nonetheless draw on the important money banking providers supplied by the Put up Workplace, whereas addressing gaps that criminals might abuse.
“This essential work is a part of the FCA’s three-year technique on lowering monetary crime and growing client safety.”
It’s essential that the extra controls required for money deposits on the Put up Workplace don’t disproportionately impression official clients, the regulator stated.
The FCA stated it expects banks and the Put up Workplace to maintain their controls below evaluation to make sure they’re proportionate to the chance and appropriate for his or her buyer base, utilizing information to refine measures the place wanted as the cash laundering dangers evolve.
The regulator will check the safeguards put in place and this work will take into account whether or not companies have taken steps to guard entry to money on the Put up Workplace for official clients.
