According to the Financial Services Authority (FSA) half of 15 banks that were given a spot inspection failed to provide an ‘adequate anti-bribery and corruption risk assessment’. It said it was considering referring some banks for further investigation and possible fines.
The FSA found that senior managers’ knowledge of corruption laws was so poor that it was “difficult for us to see how firms’ senior management could provide effective oversight”. It is concerning that only two of the firms visited had carried out an anti-corruption audit.
“Overall, despite the high profile of the issue, the investment banking sector has been too slow and too reactive in managing bribery and corruption risks,” said Tracey McDermott, the FSA’s acting director of enforcement and financial crime. “Firms across all sectors must have appropriate controls to manage their financial crime risks, whether related to bribery and corruption or otherwise.”
From next year the FSA the new Financial Conduct Authority that will take on responsibility for financial wrongdoing, continuing to monitor banks’ progress closely and will consider issuing fines.
The warning comes as an £8.75m fine was handed down to Coutts for breaches of money-laundering rules after three years of “serious” and “systemic” problems in handling the affairs of customers vulnerable to corruption because of their political links.
The FSA’s latest investigation found that investment banks generally limited hospitality to £400 for individuals and to £15,000 for corporate or sponsorship events. The report found that one banker had accepted corporate hospitality of “a three-day trip to the football World Cup in South Africa costing £10,000 for one employee and his wife”. No individual banks were named in the report.
The introduction of the Bribery Act last year was the most significant overhaul of the UK’s bribery laws for 100 years, placing legal responsibility on firms for ensuring that anti-corruption measures are enforced.
Lombard Chambers’ online Bribery Act training can help financial institutions to put in place an adequate anti-bribery and corruption risk assessment and ensure that staff, appointed as compliance officers, have the knowledge and tools to make appropriate enhancements to their systems and controls. Moreover, Lombard Chambers’ online Bribery Act training will ensure that staff, at all levels, are given either basic awareness training or more advanced training to enable them to understand and apply the requirements of the Bribery Act in their day-to-day activities. For further details on Lombard Chambers’ Bribery Act training, please click here.
See also Reuters news: Banks told to pull up socks on bribery controls