Fuzzy matching and financial sanctions
The big fine imposed on Royal Bank of Scotland (£5.6m) by the FSA for breaches of Money Laundering Regulations 2007 hit the headlines earlier this week. Apart from issues with systems and controls, the bank had problems with its ‘fuzzy matching’ (if you’re unsure, 4.21 of the Decision Notice clarifies fuzzy matching).
Few authorised firms will be of the size of RBS (although there are probably more such firms now than there were a couple of years ago) but the theme running through the Notice – inadequate checking against persons on HMT’s financial sanctions list – will be relevant to all authorised firms.
The Notice reminds us that as part of its appropriate due diligence of clients, a firm should make recourse to the consolidated list of designated persons maintained by HMT.
The links with this article will provide access to the list as well as providing access to the Money Laundering Regulations 2007 and to the guidance issued by the Joint Money Laundering Steering Group. Mention is made in the Notice to the sanctions list of OFAC (the US Office for Foreign Assets Control).We also provide a link to the relevant area for those with US interests.
Following a review by the FSA on firms’ approach to UK financial sanctions the Regulator published its findings last year. The document included examples of good and poor practice.Firms, and in particular MLROs, may find it useful to revisit the findings.