Written question asked by Nick Ainger (Labour) on Wednesday, 15 July 2009, in the House of Commons. It was due for an answer on Tuesday, 21 July 2009. It was answered by Sarah McCarthy-Fry (Labour) on Tuesday, 21 July 2009 on behalf of the Treasury.

Financial Services Authority

Question: (2) what powers the Financial Services Authority has in respect of UK-regulated banks in the event of their failure to carry out effective due diligence on the source of funds in accounts which they administer.

Answer: Under the Money Laundering Regulations 2007, a UK-authorised bank is required to undertake enhanced customer due diligence checks, including taking adequate measures to establish the source of wealth and source of funds, where it deals with a politically exposed person. It is also required to undertake enhanced ongoing monitoring. A politically exposed person is an individual who may be more vulnerable to corruption.The Financial Services Authority (FSA) is the supervisory authority for banks. It is required to effectively monitor those banks and take the necessary measures to ensure they comply with the Money Laundering Regulations. It meets this obligation by assessing risks in individual firms, and risks that impact across a range of firms within a particular market or industry sector.The FSA has both criminal and civil sanctions to address breaches of the Money Laundering Regulations. The Money Laundering Regulations add to the range of options available to the FSA under the Financial Services and Markets Act for dealing with anti-money laundering failures.

Secondary information

Type: Written question
Reference: 496 c1347-8W; 288333
Session: 2008-09
Subjects: Bank services Corruption Money laundering Politically exposed persons
Link: View this Written question on www.publications.parliament.uk