UK Financial Crime News Update – July 2022

In June 2022, the Financial Conduct Authority (FCA) imposed a fine of almost £8 million on JLT Specialty Limited (JLT Specialty), part of JLT Group PLC.

FCA

JLT Specialty Ltd

The fine was issued for financial crime control failings which permitted a bribe exceeding US$3 million to take place. JLT Specialty, which provides insurance broking, risk management and insurance claims services, placed business in the London reinsurance market for JLT Re Colombia, another company in the JLT Group. The business had been introduced by a third-party.

Between 2013 and 2017, JLT Specialty paid commission of over US$12 million to the parent company of JLT Re Colombia, JLT Colombia Wholesale Limited, which in turn paid US$10.8 million to the third-party introducer. The introducer then paid over US$3 million to government officials at a state-owned insurer in order to help win and retain their business for JLT Specialty and JLT Re Colombia.

The FCA found that the company had failed to take reasonable care to establish and maintain effective systems and controls to comply with the regulatory standards and to counter the risk that the company might be used to further financial crime.

The FCA observed that lax financial controls by JLT Specialty enabled money to flow into the pockets of corrupt officials. The company’s self-report in 2017 and the assistance provided during the investigation formed mitigating factors that were considered when the appropriate financial penalty was determined. 

Ghana International Bank Plc 

Also in June 2022, the FCA fined Ghana International Bank Plc almost £6 million for poor anti-money laundering and counter-terrorist financing controls over its correspondent banking activities. Ghana International Bank Plc (the Bank) provided correspondent banking services to overseas banks, which enabled them to make payments in different currencies and across borders.

The FCA requires banks to carry out additional checks on their correspondent banking customers to reduce the higher risk of money laundering and terrorist financing.

Nevertheless, between 2012 and 2016, the Bank failed to adequately perform the additional checks when it established relationships with the overseas banks and to assess those banks’ anti-money laundering controls. It also failed to undertake annual reviews of the information held on correspondent banks, to train their own staff adequately on how to scrutinise transactions properly and to establish appropriate staff policies and procedures.

In December 2016, following a visit to the Bank by the FCA for the purpose of reviewing its financial crime controls, concerns were raised, and the Bank agreed to hold off on taking new customer. To date, the restriction remains in place.

Although no evidence of actual money laundering was detected, the risk of money laundering as a result of these deficient systems was significant. These failings meant that Ghana International Bank Plc was unable to identify and assess the risks posed by its correspondent bank customers and properly scrutinise transactions worth £9.5 billion processed on their behalf during the relevant period. The Bank did not dispute the FCA’s findings.

The two recent cases involving JLT Specialty Ltd and Ghana International Bank Plc demonstrate that the FCA is now successfully fining companies for bribery, money laundering and the failure to put in place adequate anti-money laundering and counter-terrorist financing controls.

SFO

Petrofac

Earlier, in April 2022, the SFO successfully recovered just under £ 600,000 from personal bank accounts linked to a former fixer for the Petrofac group. This follows an earlier confiscation order worth over £ 140,000 that was issued by Southwark Crown Court against a former senior Petrofac executive, David Lufkin, in December 2021.