Financial regulator sets out measures to reduce risk of money laundering through the Post Office
Hundreds of millions of pounds estimated to be laundered through the Post Office each year
The UK’s Financial Conduct Authority (FCA) published a set of new measures on 24 April to reduce the risk of cash-based money laundering through the Post Office. The strengthened controls have been developed by the regulator, industry, government and the National Economic Crime Centre (NECC).
According to the FCA’s press release, the NECC estimates that hundreds of millions of pounds are laundered through the Post Office’s cash deposit channel each year. The new controls apply directly to the Post Office and to banks, which are required to report suspicious activity. The FCA advises the relevant institutions to keep the existing and new anti-money laundering (AML) controls under review and to use data to refine the measures, to ensure they are proportionate to the risk and suitable for the customer base.
The new measures require banks to: move towards card-based transactions and away from paying-in slips, where possible, to allow enhanced monitoring; upskill staff to spot patterns of suspicious activity; enhance monitoring capabilities that allow them to identify suspicious activity; reduce cash deposit limits at the Post Office, subject to customer arrangements, to below the existing limit of £20,000 per transaction; reduce the time taken to submit suspicious activity reports (SARs) to the National Crime Agency (NCA); and improve intelligence sharing so that information is passed on to other firms, law enforcement and the FCA on a regular basis.
The FCA has also published guidance on cash-based money laundering to coincide with the new measures, which sets out the risks and the expectations of firms’ financial crime controls, while reiterating the importance of access to cash for consumers and businesses. In terms of the next steps, the FCA plans to test firms’ approaches to reducing money laundering risk for cash deposits at the Post Office and deposits through other channels. In addition to this, the FCA will also consider the use of other channels for money laundering purposes, such as in-store payment services, to deposit cash.
Commenting on the new measures, Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: “We have worked in partnership with law enforcement, industry and government to ensure people and businesses can still draw on the vital cash banking services provided by the Post Office, while addressing gaps that criminals could abuse. This important work is part of the FCA’s three-year strategy on reducing financial crime and increasing consumer protection.”