Connect with us


UK regulator directs banks to improve trade finance supervision




Financial Conduct Authority UK Update

After a series of scandals that cost hundreds of millions of dollars in losses and allowed criminals to abuse the financial system, UK regulators have warned Britain’s top banks to improve oversight of their trade finance businesses.

An unusually blunt “Dear CEO” letter from the Financial Conduct Authority and Prudential Regulation Authority on Thursday addressed recipients of a full financial crime against money laundering, sanctions evasion, terrorist financing and processes to detect fraud. ordered to conduct a risk assessment. Client.

The FCA and PRA said they had “several high-profile bankruptcies in the past 18 months that have resulted in significant financial losses in commodities and trade finance companies.” “The assessment of individual companies highlighted several important issues related to credit risk analysis and financial crime control.”

Regulators said they could ask to confirm the assessment and follow-up actions taken.

In recent years, the commodity trading industry has been shaken by a series of scandals that have caused significant losses to lenders including HSBC and Credit Suisse.

The case highlighted a wide range of issues related to trade finance, where banks provide credit to companies that buy and sell commodities around the world, such as aggressive lending practices and outdated paper-based systems that are vulnerable to abuse and counterfeiting.

In April 2020, Hin Leong Trading, an oil trader owned by one of Singapore’s richest people, went bankrupt with over $3 billion in debt to 20 lenders. The founders have admitted to hiding losses from futures market transactions and selling promised oil stocks as collateral for loans.


It was followed by the collapse of Greensill Capital in March, which led to further scrutiny of trade finance. The Financial Times reported in April that a loan from a British financial firm to Sanjeev Gupta’s commodities trading business was based on suspicious invoices that could indicate fraud.

The UK’s Serious Fraud Office has since launched an investigation into suspected fraud and money laundering in the metal empire of Gupta. The steel conglomerate’s GFG Alliance group has denied wrongdoing and pledged to fully cooperate with the SFO investigation.

In addition to GFG, Greensill has provided loans to several commodities trading companies that went bankrupt in 2020 on fraud charges, including Phoenix Commodities and Agritrade.

Some of the most common shortcomings listed by the FCA and PRA in their letter were over-general customer risk assessments and limited credit analysis due to the lack of oversight of dual-use products (those that could be used for both military and business purposes).

“It has been found that companies have not fully assessed these risks, have not been able to substantiate the checks they have performed, or in some cases have discounted them improperly,” the regulator said. “Given the industry of the jurisdiction or other parties involved, we have identified instances where the entity facilitated a transaction without a reasonable business rationale.”

Some European banks have lost their desire to finance commodity transactions. ABN Amro went out of business and BNP Paribas, historically one of the most active lenders in the region, drastically cut its exposure.

The French bank’s professional division suffered losses from several commodity trading companies, including Coex Coffee in the United States, GP Global Group and Phoenix Commodities in the Middle East.

This comes after US authorities imposed a $8.9 billion fine in 2014 for conspiring to violate sanctions banning business with Sudan and other regimes.

Additional report by Robert Smith




The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos


to request, modification Contact us at Here or [email protected]