UK Watchdog Warns Banks About Post Office Money Laundering

The United Kingdom’s financial watchdog wants to stop money laundering through the Post Office, a retail company that provides products and services, including postage stamps and banking.

The Financial Conduct Authority (FCA) is working with other organizations to improve controls to make sure customers can keep using the Post Office for banking while keeping out bad actors, according to a Monday (April 24) announcement.

“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,” said Sheldon Mills, executive director of consumers and competition at the FCA, in the announcement. “This important work is part of the FCA’s three-year strategy on reducing financial crime and increasing consumer protection.”

To that end, the FCA has set out new measures for banks, including a shift toward card-based transactions and away from “paying-in slips” to allow for better monitoring.

The authority has also reduced cash deposit limits at the Post Office to below the existing limit of 20,000 pounds (about $25,000) per transaction, while also reducing the time taken to submit suspicious activity reports to the National Crime Agency (NCA), “enabling them to take timely action.”

The FCA said its measures also include improving intelligence sharing so that “information is passed on to other firms, law enforcement and the FCA on a regular basis.”

Earlier this month, the British government implemented a new Economic Crime Levy under its Finance Act 2022 to help combat money laundering.

Under the law, the U.K.’s roughly 4,000 anti-money laundering (AML) regulated entities — organizations with U.K. revenue exceeding 10.2 million pounds (about $10.6 million) per year — will pay a fixed yearly charge depending on the revenue bracket into which they fall.

According to the government, the levy also aims to raise a “desired” amount of 100 million pounds (about $125 million) per year to help fund advanced AML and economic crime capabilities.

In comments emailed to PYMNTS, Ted Datta, financial crime compliance expert at Moody’s Analytics, said the new levy “is an important step in unification of the entities involved in the fight against money laundering.”

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