Subsidiary bank penalised for further failures in its anti-money laundering controls
The Financial Conduct Authority (FCA) has imposed a fine of £7.67 million on Guaranty Trust Bank UK Limited (GT Bank) for lapses in its anti-money laundering (AML) systems and controls.
The regulator said that between October 2014 and July 2019, GT Bank failed to undertake adequate customer risk assessments, such as assessing or documenting the money laundering risks posed by its customers. It was also found that the bank failed to monitor customer transactions and business relationships to the required standard.
The FCA requires firms to have in place effective AML controls to mitigate the risk of individuals and organisations using financial institutions to circumvent restrictions designed to prevent them benefitting from assets obtained by illegal means.
Despite repeated warnings by internal and external sources, including the FCA, GT Bank failed to take appropriate action to fix failures in its anti-money laundering systems and controls.
From early 2018, GT Bank stopped taking on new customers, and later that year, GT Bank agreed to wider voluntary restrictions on business, given the FCA’s ongoing concerns. Requirements remained in place until the middle of 2021 when they were lifted after the bank completed a remediation plan, checked by an independent third party.
GT Bank did dispute the FCA’s findings and agreed to settle, which means it has qualified for a 30% discount. Without the discount, the financial penalty would have been £10.96 million.
The FCA considered GT Bank’s conduct “particularly egregious” as it was not the first time that the bank has faced enforcement action in relation to its AML controls, with the regulator fining GT Bank £525,000 in August 2013 for serious and systemic failings.
“GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so,” Mark Steward, executive director of enforcement and market oversight at the Financial Conduct Authority, remarked. “GT Bank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period.”
Steward stressed that firms must protect themselves and those dealing with them from financial crime risks, especially money laundering.
“The FCA is determined to ensure the market for financial services is safe, clean, and trusted with robust systems and controls in place to stymie financial crime,” he said. “The FCA will continue to take action when these standards are not met.”
GT Bank is a wholly owned subsidiary of Guaranty Trust Bank Nigeria Limited, which is a wholly owned subsidiary of Guaranty Trust Bank Holding Company Plc, a Nigerian multinational financial services institution that provides a range of banking services across Africa and the United Kingdom.
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