New rules on trade finance could seriously hit the ability of small and medium-sized firms in the UK to export, the British Bankers Association has warned.
Responding to the consultation by City regulator the Financial Conduct Authority on what it considers good and bad practices in trade finance, the banks’ lobby group said its plans “could conflict with wider UK Government priorities around international trade and the competitiveness of our member banks.”
The FCA’s review of trade finance found that banks were generally sound when it came to not dealing with people, firms or countries where official sanctions had been imposed but less sound when it came to anti-money laundering and deals on “dual use goods” which have both civil and miltary applications.
Writing to the FCA, the BBA’s director for financial crime Matt Allen said: “The level of regulatory expectations for financial crime controls for trade finance appears to be set at such a high level that this would call into question the viability of some trade finance business conducted by BBA members, particularly in relation to smaller corporate and SME relationships.”
He warned that a too-rigid approach “may actually provide new opportunities for financial criminals” and urged the FCA to delay a final decision and hold further talks.