FSA has fined an MLRO for the first time. It fined the MLRO £17,500 and his firm £49,000. It found many failings in the firm’s AML systems and controls over a four-year period, including:

  • no adequate procedures for verifying client identity; 
  • failure to verify adequately the identity of many clients; 
  • failure to keep adequate records of client identity verification; and 
  • failure by the MLRO to take reasonable steps to implement adequate procedures for controlling money laundering risk.

The firm is a London-based corporate advisory firm with small and medium-sized corporate clients in various countries including several Central and Eastern European ones. The firm had AML Handbooks, drafted by external consultants, but failed to follow them. Its verification procedures were not appropriate for any but the lowest risk clients. FSA took into account that the firm’s actions were not in keeping with the JMSLG guidance at relevant times. FSA said the fine would have been a lot higher were it not for the firm’s limited resources to pay it. It found no evidence that money laundering had occurred.