As part of our responsibility to ensure the integrity of the markets in which we operate, we require all authorized firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime.
Why is Oil & Gas a high risk industry?
In emerging markets, oil and gas companies often find themselves dealing with state-owned organizations. Whether wholly- or partially-owned, these organizations drive up risk because employees are considered foreign officials for the purposes of bribery and corruption regulations
All traders, partners and customers must satisfy us that they have robust governance, effective risk procedures and adequate internal control mechanisms to manage their financial crime risk. Some firms will also have further obligations placed on them by law.
By using effective systems and controls, your firm can detect, prevent and deter financial crime.
You should build and maintain these systems as part of your obligations as a regulated firm. Some firms will also be required to comply with the Money Laundering Regulations.
The approaches that you should take involve assessing the risks that your business may be used for the purposes of financial crime and then mitigating those risks effectively through:
identifying your customers, partners, suppliers, agents and representatives;
understanding your relationship with them;
monitoring the way they use your services to identity anything suspicious.
Your systems need to be appropriate and proportionate to the nature and scale of your business. There is no 'one size fits all' approach that we expect firms to adopt. It will vary, for example, between large firms and small firms, firms operating in products or areas of high risk, and those offering products to customers where the firm assesses there is less financial crime risk.
Senior management should take clear responsibility for managing financial crime risks and be actively engaged in addressing these risks.
In order to transact with TREE and FuelBank, your firm should:
have a thorough understanding of its financial crime risks in order to apply proportionate systems and controls
have an organizational structure that promotes coordination and information sharing across the business
have appropriate up-to-date policies and procedures in place that can be easily accessed and understood by all staff
employ staff who have the skills and expertise to do their jobs effectively
review employees’ competence and take appropriate action to ensure they remain competent for their role
manage the risk of staff being rewarded for taking unacceptable financial crime risks and
be able to provide evidence to demonstrate that it has adequate systems and controls to prevent the risk that it might be used to further financial crime
Your firm’s efforts to combat financial crime should also be subject to challenge. Senior management should ensure that policies and procedures are appropriate and are followed, e.g. having robust internal audit and compliance processes that routinely test the firm’s defenses against specific financial crime threats.