Financial Conduct Authority
AML systems and controls – FCA publishes Final Notice to Guaranty Trust Bank – 10 January 2023
The FCA has published a Final Notice issued to Guaranty Trust Bank (UK) Limited (GT Bank). The FCA has fined the Bank £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.
During the relevant period, GT Bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers. GT Bank breached Principle 3 of the FCA’s Principles for Businesses and a number of SYSC rules by failing to take reasonable care to organise and control its AML process responsibly and effectively through adequate risk management systems. GT Bank failed to take a number of specific steps, including:
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taking appropriate remedial action to rectify the weaknesses in its AML systems and controls;
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carrying out adequate customer risk assessments, and adequate customer due diligence and enhanced due diligence;
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establishing, verifying and evidencing the source of funds and wealth for higher risk customers;
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ensuring relevant staff were provided with appropriate AML training; and
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implementing a culture where customer-facing teams gave adequate and effective consideration to the money laundering risks posed by prospective and existing customers.
The FCA notes that these weaknesses were repeatedly highlighted to GT Bank by internal and external sources, including the FCA. Despite this, GT Bank failed to take appropriate action to resolve them. The regulator states that GT Bank’s conduct is “particularly egregious” given that this is the second fine it has received for AML control failings. The first fine was issued in August 2013.
GT Bank did not dispute the FCA’s findings and agreed to settle, meaning it qualified for a 30% discount. Without this discount, the financial penalty would have been £10,959,700.
FCA: Final Notice of Guaranty Trust Bank Limited
Press release
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AML systems – FCA publishes Final Notice issued to Al Rayan Bank plc – 11 January 2023
The FCA has published a Final Notice issued to Al Rayan Bank plc (the Bank). The FCA has imposed a fine of £4,023,600 on the Bank for failing to put in place adequate anti-money laundering (AML) systems between 1 April 2015 and 30 November 2017.
During the relevant period, the Bank allowed money to pass through it and be used within the UK without carrying out appropriate checks. It failed to adequately check its customers’ source of wealth and funds to ensure the money was not connected to financial crime. The failings were made worse by the lack of proper training provided to staff about how to handle large deposits, which further heightened the risk of money laundering and financial crime. In particular, the Bank failed to meet the requirements of Principle 3 of the FCA’s Principles for Businesses (that a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems). Particular failures of the Bank included:
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a failure to establish, implement and maintain appropriate and risk sensitive policies and procedures in relation to the application of enhanced due diligence, and the handling and treatment of cash deposits;
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a failure to establish high-risk customers’ source of wealth and funds at the onboarding stage, which contributed to its inability to corroborate adequately the origin of customer monies in subsequent large, in person, cash deposits; and
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a failure to adequately scrutinise transactions undertaken through the course of its relationship with customers.
The FCA notes that the Bank was aware of these weaknesses and failed to implement effective changes to resolve them, despite the FCA raising concerns about the inadequacies of the Bank’s systems. After the FCA visited the Bank in 2017, it voluntarily agreed not to take on further high-risk customers. Although this restriction has now been lifted following improvements to the Bank’s systems and controls, the Bank remains subject to some limited restrictions while further improvements are made.
Al Rayan did not dispute the FCA’s findings and agreed to settle, meaning that it qualified for a 30% discount. The FCA would have imposed a financial penalty of £5,748,000 if a settlement had not been reached.
FCA: Final Notice of Al Rayan Bank Plc
Press release
