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FSA fines Turkish Bank £294k for anti-money laundering failings

FSA building 480

The FSA has fined Turkish Bank (UK) £294,000 for widespread money laundering breaches which created an “unacceptable risk” that the bank could be used to launder money.

Between December 2007 and July 2010 TBUK provided correspondent banking services for nine Turkish Banks and six banks in Northern Cyprus. Correspondent banking involves the provision of cross border services such as payment and clearing for overseas banks.

The FSA say during this time Turkey and Northern Cyprus did not have anti-money laundering requirements equivalent to those in the UK.

The FSA visited TBUK in July 2010 as part of a thematic review of how banks operating in the UK were managing money laundering risks.

TBUK’s breaches included failing to establish and maintain appropriate and risk-sensitive anti- money laundering policies and procedures for its correspondent banking relationships.

It also failed to carry out adequate due diligence on the banks its dealt with, and failed to maintain adequate records of its relationships with those banks.

FSA acting director of enforcement and financial crime Tracey McDermott says: “Turkish Bank fell far short of the standards we expect of firms in managing their money laundering risks.  This was despite clear warnings from the FSA that it needed to improve.

“Turkish Bank’s correspondent banking business made it particularly vulnerable to money laundering risks and its failings exposed UK financial services to the possibility that money could be laundered through the UK.  We will continue to demand the highest standards from banks and to take tough action for those banks that fail to meet them.”

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