09/09/2021

The FCA took action to contact all the firms (banks mainly) involved in the Trade Finance business, in order to remind them of their duties to perform thorough risks analysis in two domains: credit risk and financial crime controls.

This comes on the back of high-profile failures of commodity and trade finance firms, which resulted in significant losses over the last 18 months.

Firms are “encouraged” to improve their risk assessment processes, their counterparty analysis, their transaction approval procedures, their transaction payments risk management and controls.

See the Dear CEO letter here – https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/letter/2021/september/trade-finance-activity-letter.pdf?la=en&hash=DFDAD6E357DCDFAF1C4EA5B017509C601C64442B