The brokerage arm of US food processing giant Archer Daniels Midland (ADM) has been fined nearly £6.5m for “inadequate” anti-money laundering controls.
The watchdog said that the nature of the ADM Investor Services International‘s business and client base presented potentially high levels of risk because of its business model, geographical location of customers, and high-risk clientele including “politically exposed persons”.
The FCA first expressed concerns about the commodities broker’s anti-money laundering controls with the commodities broker in 2014.
Yet two years later after a company visit, the FCA found no improvement.
Failings included that customer risk assessments that were “basic”; a company-wide money laundering risk assessment was not conducted; little evidence was found to support adequate monitoring with periodic customer reviews; and outdated policies that referred to old legislation were discovered.
The broker agreed to the requirements imposed by the regulator and introduced new anti-money laundering policies, resulting in these being lifted in January 2018.
Therese Chambers, joint executive director of Enforcement and Market Oversight, said: “All financial firms need to have effective anti-money laundering checks in place. 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 Investor Services said: “While no actual harm was identified, ADMISI recognises that the systems in place to mitigate those risks during this period fell short of the expected standards.
“On identification of the situation, we acted swiftly to make the changes necessary and ensure appropriate policy and procedural updates. These included the strengthening of ADMISI’s senior management team with a new Compliance Director and Finance Director and the appointment of a specialist Money Laundering Reporting Officer.
“ADMISI is pleased that the issue has been resolved and is confident in the actions put in place to meet all regulatory requirements.”