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FSA fines Willis Limited £6.9m

The FSA has fined Willis Limited £6.895m for failings in its anti-bribery and corruption systems and controls.

The fine, which is the largest in relation to financial crime systems and controls to date, relates to an unacceptable risk being created by Willis Limited over payments it made to overseas parties that could have been used for corrupt purposes. Willis Limited is one of the leading insurance and re-insurance brokers in the London market.

Between January 2005 and December 2009 Willis Limited made £27m worth of payments to overseas third parties who assisted it in winning and retaining business from overseas clients, particularly in high risk jurisdictions.

The FSA found that Willis Limited failed to ensure it established and recorded an adequate commercial rationale for the payments, failed to ensure adequate due-diligence on the third parties was made before doing business with them and failed to adequately review its relationship on a regular basis to confirm that Willis Limited should continue with the partnership.

The FSA says these failures contributed to a weak control environment surrounding payments to overseas third parties and gave rise to an unacceptable risk that these payments could be used for corrupt purposes, including paying bribes.

The regulator also says that Willis Limited failed to adequately monitor its own staff each time it engaged with the third party, an adequate commercial rationale had been recorded and that sufficient due diligence had been carried out. The FSA says Willis Limited improved its policies in August 2008 but it failed to ensure that its staff were adequately implementing them. It also says that senior staff at Willis Limited did not receive the relevant information about the performance of relevant Willis Limited policies to allow them to access whether bribery and corruption risks were being appropriately managed.

The FSA says that during the investigation Willis Limited found $227,000 of payments made to two overseas third parties in respect of business carried out in Egypt and Russia. Both have been reported to the Serious Organised Crime Agency.

FSA acting director of enforcement and financial crime Tracey McDermott says: “Willis Limited failed to take the appropriate steps to ensure that payments it was making to overseas third parties were not being used for corrupt purposes. This is particularly disappointing as we have repeatedly communicated with the industry on this issue and have previously taken enforcement action for failings in this area.

“The involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector.  The action we have taken against Willis Limited shows that we believe that it is vital for firms not only to put in place appropriate anti-bribery and corruption systems and controls, but also to ensure that those systems and controls are adequately implemented and monitored.”  

Willis Limited cooperated with the FSA and agreed to settle at an early stage of the FSA’s investigation.  The firm qualified for a 30 per cent discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £9.85 million.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Willis always gave our company quality service. FSA over the top yet again.

  2. Another Pissed Off IFA 21st July 2011 at 11:49 am

    Some of these so-called high risk territories could look at the UK and say, ‘Ya know what, Guys. We’d just love to do business with ya but every time we get a deal cookin’ some idiot shows up with a clipboard to show us how it SHOULD be done and wants US to pay HIS wages for screwin’ us. It’s too corrupt in the UK. We’re outta here. Catch ya’ later.

  3. In this stirile ‘anti real world’ environment, how on earth do they expect to make a sussess by filling seats without corporate support?

  4. Another Pissed Off IFA 21st July 2011 at 12:48 pm

    It appears that less than 1% ($227K out of GBP27M) was suspect.

    On a risk-based approach dealing with countries like Egypt I would say that ain’t at all bad. One wonders how much of a screw-up would have happened if the FSA had been administering the funds?

    Also, the FSA fine seems a little steep at about fifty times the amount of capital that went astray.

  5. UK Plc, how disadvantaged and uncompetitive can it get ? Meanwhile in the real world….

  6. Just as a matter of interest, but are the expenses of H Sants and other senior FSA staff available for scrutiny?
    Clearly it is inconceivable that they could have been fiddling their expenses like some others in the public eye and I’m sure they would want the public to be sleeping easier in their beds knowing that that they are wholly above reproach.
    Perhaps some journalist would be able to find a few moments to make the appropriate FOI requests so we can see that Hector’s House is as it should be?

  7. Quote “The FSA found that Willis Limited failed to ensure it established and recorded an adequate commercial rationale for the payments, failed to ensure adequate due-diligence on the third parties was made before doing business with them and failed to adequately review its relationship on a regular basis to confirm that Willis Limited should continue with the partnership.”

    Seems this paragraph pretty well covers the reason for the fine.

    Guilty of Breaching FSA Rules or Anti-Bribery rules (or both)?

  8. Goody, goody two shoes !

    Just like UK environmental policies achieve an insignificant reduction in polution worldwide (whilst China is belching out a thousand more times the crap we do), so our anti-money laundering policies are doing more harm to UK business and finance than any incremental harm being caused by a few pounds sterling getting into the wrong hands.

    But the FSA thinks it’s doing a worthwhile job so that’s OK!

  9. Our holier than thou government knowingly does business with despots, tyrants, and murderous regimes but woe betide any private company doing the same – even unwittingly.

    F******* hypocrites !

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