The FCA Financial Crime Guide (FCG) provides practical, non-binding guidance to help firms establish and maintain systems and controls that prevent them from being used to facilitate financial crime. While it does not prescribe specific methods for WTR compliance, it sets expectations for firms to manage associated risks, including those arising from money laundering, terrorist financing, fraud, sanctions breaches, and other forms of financial crime that intersect with wire transfers.

Systems & Controls for Financial Crime

The Guide emphasises the importance of effective governance, management information, staff training, risk assessments, and documented policies to manage financial crime risks. These controls are the backbone of WTR compliance, ensuring accurate data is collected and retained about both the originators and beneficiaries of wire transfers.

Risk-based approaches should be adopted across all areas, with higher scrutiny applied where transactions or clients present greater risks. Firms are expected to assess these risks continuously and adjust their control measures accordingly.

Customer Payments & Wire Transfers

In Section FCG 3.2.13G, the Guide addresses customer payments, focusing directly on the Funds Transfer Regulation requirements that underpin WTR. It mandates that banks collect and attach information about payers and payees to interbank payment messages and validate this information in both outbound and inbound messages.

Firms must ensure:

• That they verify customer identity before initiating payments.

• That SWIFT or equivalent payment messaging systems include meaningful payer and payee information.

• That they trace or chase up missing data in inbound transactions.

• That they engage in quality assurance through risk-based sampling of transactions.

• That cover payments are not used to obscure sender or receiver information.

These expectations directly align with FATF Recommendation 16 and the UK’s transposition of WTR obligations.

Sanctions & Screening

The Guide links sanctions screening and wire transfer obligations by requiring firms to verify that originators and beneficiaries of payments are not subject to sanctions. Failure to do so may result in the processing of prohibited transactions, which constitutes a breach of both sanctions law and WTR.

Firms are encouraged to use robust automated systems capable of fuzzy matching and to apply enhanced due diligence where higher risks are identified, such as in transactions involving cryptoassets or high-risk jurisdictions.

Transaction Monitoring

Transaction monitoring is a core theme throughout the FCG. The FCA expects that firms implement both rule-based and behavioural monitoring systems to detect anomalies in payment flows. These systems should be proportionate to the firm’s size and risk exposure, and they must enable the escalation of suspicious activity, potentially leading to Suspicious Activity Reports (SARs).

The Guide also acknowledges the role of AI and network analytics in improving the quality and efficiency of monitoring efforts, especially in relation to complex or opaque payment networks.

Record Keeping

Firms are required to retain full records of all transactions and customer due diligence measures for at least five years. This is vital for enabling audit trails, responding to regulatory inquiries, and facilitating cross-border cooperation in financial crime investigations. These obligations underpin the traceability goal of WTR.

Expectations for Cryptoasset Businesses

From 1 September 2023, cryptoasset transfers became subject to the same transparency and data requirements as fiat wire transfers. Section FCG 3.2.13G notes that cryptoasset firms must implement systems to ensure originator and beneficiary information is transmitted with each transaction. Firms must also monitor addresses linked to higher risk activity, such as mixing services, and keep customer data up to date.

Conclusion: WTR Compliance Integration

The FCA Financial Crime Guide integrates wire transfer compliance into its broader anti-financial crime expectations by insisting on data integrity, transparency, monitoring, and sanction screening for all payment flows. While not exclusively focused on WTR, the Guide sets out foundational practices that ensure wire transfers meet both domestic regulatory requirements and international standards. Firms regulated by the FCA must align their operational procedures with the principles in the FCG to fulfil WTR obligations effectively and sustainably.