Question to the Home Office:

To ask the Secretary of State for the Home Department, what steps her Department is taking to (a) protect businesses subject to CEO fraud and (b) hold accountable banks which have not followed money-laundering check procedures in opening accounts.

The threat posed by frauds enabled by social engineering, such as in CEO fraud, is one this Government takes very seriously. Through the Joint Fraud Taskforce, a truly innovative collaboration between the financial sector, law enforcement and Government, we are driving system-wide improvements to remove vulnerabilities which fraudster exploit to commit this type of crime. The Taskforce is investing in a nationwide fraud prevention campaign ‘Take 5’, funded by the financial sector and Government, so that individuals know how to act when faced by a fraudster to avoid being scammed. The Taskforce is also developing a funds repatriation scheme, so that stolen money can be tracked across the payment network, frozen, then repatriated back to the victim of the crime also stopping the money from getting into the hands of the criminal.

The Financial Conduct Authority (FCA) has the objective of protecting and enhancing the integrity of the UK financial system. The FCA’s rules require that firms must maintain effective systems and controls to prevent the risk that they might be exploited by criminals. These systems and controls should enable the firm to identify, assess, monitor and manage money laundering risk. A firm’s systems and controls must be comprehensive and proportionate to the nature, scale and complexity of its activities. Where a firm’s systems and controls are not adequate, the FCA can and does take enforcement action. On 31 January, the FCA fined Deutsche Bank £163,076,224 for failing to maintain an adequate anti-money laundering (AML) control framework during the period between 1 January 2012 and 31 December 2015. This is the largest financial penalty for AML controls failings ever imposed by the FCA.