To ask Her Majesty's Government further to the court judgment in R (The Financial Conduct Authority) V National Westminster Bank Plc on 13 December 2021, what plans they have to introduce legislation to enable clawback of remuneration from directors of entities found guilty of money laundering.
22 February 2022
The Government does not intend to introduce legislation to enable claw back of remuneration from directors of entities found guilty of money laundering. This is because the UK financial services regulators – the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) – jointly set requirements for firms, including National Westminster Bank Plc, regarding the claw back of promised, or paid, remuneration.
Under these requirements, where misconduct or material poor performance occurs - including for anti-money laundering controls failings - firms would need to consider whether promised or paid remuneration can be justified, or should be returned (“clawed back”) for senior and materially risk-taking staff. The regulators have supervisory and enforcement tools to deploy in cases where they are not satisfied that a firm has complied with their rules.
The FCA’s successful prosecution of NatWest Plc in 2021 represents the first criminal prosecution brought by the FCA against a bank under the Money Laundering Regulations, and demonstrates the FCA’s commitment to using the full range of powers available to tackle anti-money laundering failings.