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.”