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FCA fines Nigerian subsidiary bank £525k

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The Financial Conduct Authority has fined Guaranty Trust Bank £525,000 for failings in its anti-money laundering controls for high risk customers between May 2008 and June 2010.

The FCA says the failings are particularly serious as they affected customers based in countries associated with a higher risk of money laundering, bribery or corruption, including accounts held by politically exposed persons.

GT Bank, a subsidiary of Nigerian Guaranty Trust Bank, opened an office in London in May 2008 offering retail and wholesale banking products and services to private, corporate and institutional clients.

The FSA reviewed GT Bank’s controls as part of a thematic review into banks’ management of money-laundering risks in 2010.

The review of GT Bank raised significant concerns and after further investigation, the FCA found GT Bank failed to establish effective anti-money laundering policies and procedures when they established their UK operations.

This included failures to:

  •   Assess or document potential money-laundering risks posed by higher risk customers
  • Screen prospective customers against sanction lists or databases of PEPs

  • Obtain and/or document senior management approval to establish a business relationship with PEPs

  • Establish the purpose and intended nature of prospective customers’ accounts or the sources of higher risk customers’ wealth or funds  

  • Review the activity of higher risk customers’ accounts and check that the information they held on these customers was up to date.

The FCA says the company breached regulatory rules which requires firms to take reasonable care to organise and control their affairs responsibly and effectively, and a number of rules on systems and controls.

FCA director of enforcement and financial crime Tracey McDermott says: “GT Bank’s failures were serious and systemic and resulted in an unacceptable risk of handling the proceeds of crime.

“Regardless of whether firms are well established or new to the industry they must ensure they have systems and controls to manage money laundering risk.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Perhaps the fine will go straight into our Government coffers to off set against the Foreign aid given to this particular country.

    Ironic that the bank should fined for audit failures when the foreign aid received is not subject to the same stringent checks!

    Ah well, that’s Government for you.

  2. Why were the allowed to open offices in the first place without demonstrating that their policies and procedures were up to scratch in the first place?

    Maybe the FCA should fine the FSA for its regulatory failings?

  3. To receive payment the FCA have had to send a release payment of 100k to the same oufit in Lagos I sent some cash to yesterday

  4. Explanation please. How come this fine was so reasonable in comparison with (for example):

    EFG bank £4.2 million fine for the same failings
    Coutts £8.75 million for similar failings and
    HSBC $1.9 BILLION for the same failings.(yes, I know a different regulator).

    I would put money on it that what the regulator discovered at GT Bank was just the tip of the iceberg. Something doesn’t smell right at all.

  5. Harry, why would the prospect of further action mean the FCA imposes a smaller fine than in previous cases?

  6. Iv got some pigeons in my bank account, can someone help me clean it out? x

  7. Oh dear – I can see it now.

    “Dear FCA

    We are a naughty Nigerian Bank. We must pay you £525,000.

    To facilitate payment you must just pay us £25,000 and give us your bank details….”

  8. I wonder what Godfey Bloom’s take on this would be.

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