More risky than we thought

I am still catching up on my reading from last month, so please forgive me.  But a more eagle-eyed reader in Jersey spotted that the UK’s financial regulator, the Financial Conduct Authority, chose the summertime – 18th July to be precise – to publish its own list of high risk countries.  According to the FCA’s own press release on the matter, “We categorise the following countries in accordance with the current level of risk they pose to the FCA’s financial crime objectives linked to tackling money laundering, sanctions systems and controls, terrorist financing, and bribery and corruption.  Our assessment also considers the size of a country’s economy (GDP) or financial markets.”  There are two surprising things about this list, and one unsurprising thing.

The first surprising thing is that it is the FCA publishing the list, and not HM Treasury.  After all, it is HMT that transposes the FATF’s naughty list into UK obligation (as they did most recently here).  So what does this list mean for those covered by the UK’s AML regime but not regulated by the FCA – is it irrelevant, or will its very existence count against them if they have not thought to check FCA as well as HMT and their own trade body?  And what about other regulators in both the UK and overseas?  Will they start their own lists too?  And will they match?

The second surprising thing is the enormous length of the list.  There are 95 countries on it, out of a possible 200-ish in the world – so according to the FCA, half the world is high risk.  I know it’s not an exact science, but the basic bell-curve of distribution suggests that this is a bit much.

The unsurprising thing is that the US is not on the list, even with half the world making it on there.  Well, it’s surprising, when the US is the largest money laundering jurisdiction in the world, but it’s not surprising.  Oh, you know what I mean.   And I nearly forgot to give you the link to the list: here it is.