The UK's Financial Conduct Authority (FCA) has imposed a hefty fine of £6.47 million (approximately $7.9 million) on commodities services broker ADM Investor Services International Limited for its inadequate anti-money laundering (AML) systems and controls.
The FCA pointed out that due to the global reach of ADM's operations and its clientele, which includes politically exposed persons, there was a potentially high risk of money laundering. Concerns were initially raised by the regulator back in 2014. However, when the FCA conducted a follow-up visit two years later, it discovered significant shortcomings. These included a lack of a comprehensive firm-wide money laundering risk assessment and policies referencing outdated legislation.
Although requirements for remedial action were lifted in January 2018, the FCA found that ADM's failures left it vulnerable to potential use in facilitating financial crime.
Therese Chambers, FCA Joint Executive Director of Enforcement and Market Oversight, emphasized, "ADM Investor Services’ failures put it at risk of being used to facilitate financial crime. These failings continued even after the firm had received clear warnings on the need to improve its systems."
ADM, a part of the global nutrition and agricultural conglomerate Archer-Daniels-Midland Co based in Chicago, acknowledged that its risk mitigation systems fell short of expected standards between September 2014 and October 2016. Importantly, no actual harm was identified.
In response, ADMISI expressed satisfaction and stated that "ADMISI is pleased that the issue has been resolved and is confident in the actions put in place to meet all regulatory requirements”.
ADM did not contest the FCA's findings, making it eligible for a 30% discount on the fine, ultimately reducing it from the initial £9.2 million. This development underscores the FCA's commitment to upholding robust AML standards within the financial services sector and serves as a stern warning to other firms to ensure compliance with AML regulations.
By fLEXI tEAM