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The FinCEN files have branded the UK financial industry to be a high-risk jurisdiction

October 14, 2020

A considerable amount of controversy has arisen from the FinCEN files leak. It has branded the banking industry as negligent for “allowing” transactions that are potentially linked to criminal activity to go through its systems without the appropriate due care or diligence.

The finger has been pointed; for too long the banking and financial services sectors have been primarily focused on their bottom line as opposed to combating money laundering, terrorist financing and other areas of financial crime.

There have been multiple examples of leaked files relating to corporate entities and individuals who have been linked to not acting on the right side of the law. In the last decade, there have been four prominent leaks that have brought a lot of attention to the independent banking sector, regulating authorities and the laws that have been exploited in each country associated with these leaks.

What are the FinCEN files?

FinCEN is the Financial Crimes Enforcement Network, a bureau of the U.S Department of the Treasury, the equivalent of the UK’s NCA (National Crime Agency). It is the role of FinCEN to investigate and safeguard US financial systems from illicit use.

The FinCEN files that were leaked to Buzzfeed News and then further shared with the International Consortium of Investigative Journalists. The ICIJ analysis found that the documents leaked showed a combined value of more than $2 trillion between 1999 – 2007 was flagged as representing possible money laundering and/or other criminal activity.

The leaked documents highlighted five global banks, JP Morgan, HSBC, Standard Chartered, Deutsche Bank and Bank of New York Mellon, who continued to profit from these transactions post the U.S authorities having previously fined these financial institutions for failing to understand the underlying flow of funds.

The Law vs Criminal Activity

If we look back in history in chronological order of the money laundering regulations, acts and the supervisory bodies put into force by the UK as opposed to the criminal act of money laundering itself, we will see the efforts and changes made over the years.



The above illustrates that within the UK there have been mandated money laundering regulations, acts and appropriate supporting agencies implemented to provide the various industries with the tools to combat money laundering, terrorist financing and all other related crime.

The FinCEN files documentary focused on events that occurred when money laundering regulations were not as strong as they are now. How fair is it to brand the banks as the sole facilitator of money laundering, when in fact they may have been doing what was expected of them, as set out in the regulations and the law, in combating financial crime?

The Panorama documentary and media coverage of the leak

In my view, the documentary implied that the UK financial industry was “allowing” illicit funds to pass through it without following regulatory requirements. In some cases, this may have been proven to be the case, but that is one side of the coin. On the reverse, the financial industries that were named and shamed were in fact doing what was expected of them; raising a Suspicious Activity Report (SAR), requesting a Defence Against Money Laundering (DAML) when required and following the instructions of the National Crime Agency (NCA).

Outside of those actions, all firms are encouraged to take a risk-based method when approaching potential money laundering. This is not limited to the onboarding of the customer but also covers ongoing due diligence, transaction monitoring and so forth.

Since the documentary has been televised the Treasury Committee has been in contact with the Ministers of Climate Change and Corporate Responsibility, the Department of Business, Energy and Industrial Strategy (BEIS), Minister for Security, HMRC and the FCA, looking for answers as a result of the FinCEN papers.

See the letters that were posted to those authorities here.


I ask the question, who is to blame? Well, in my opinion, everyone is! From the independent financial institutions/service providers who are the first point of contact for an individual or entity, to the supervisory authorities who are there to ensure the financial industry is being monitored in line with the regulations and finally to our UK law enforcement, who have the ultimate power to enforce.

One entity or person does not hold the weight of the financial service industry and pointing fingers in the wrong direction only create distrust and uncertainty for the end consumer. If you are not versed in the world of financial crime, it would be easy to make assumptions and place that blame when in fact it is not the whole picture.

The supervisors, the law enforcement agencies and the financial sector, in my opinion, need to work together better towards the end goal by sharing information, best practices, and trends of emerging risks related to their relevant sector. Data is a key tool in understanding how a business can operate, be proactive and react accordingly before the impact of the risk is felt.

The FinCEN papers highlight some truths about the industry (as a whole) especially highlighting that more can be done by way of improving controls and structure to an organisation’s approach towards combating money laundering, terrorist financing and all areas relating to financial crime. That said, in my opinion, half of the documentary was based on pointing fingers at individuals that didn’t really relate to the real issue, makes for good TV but it is not the reality.


Nadia Lemard

Payment Services & Financial Crime Manager

How can we help you?

If you’d like to know more about how we can help you with your anti-financial crime arrangements or with any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email