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FCA Fines GT Bank £7.67M for AML Lapses

by Arnab Shome
  • The bank had lapses in AML systems and controls between October 2014 and July 2019.
  • It did not rectify the lapses despite multiple internal and external flags.
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The UK’s Financial Conduct Authority (FCA ) has continued its crackdown against anti-money laundering (AML ) lapses and imposed a monetary penalty of more than £7.67 million against Guaranty Trust Bank (UK) Limited (GT Bank).

FCA Fines GT Bank for AML Failures

Announced on Tuesday, the fine came for lapses in the bank’s AML systems and controls between October 2014 and July 2019. The financial penalty would have been £10.9 million, but GT Bank received a 30 percent discount for not disputing the FCA’s findings and agreed to a settlement.

GT Bank, AML, FCA

It was the second such enforcement action faced by GT Bank for AML lapses. The regulator slapped a £525,000 penalty on GT Bank in August 2013 for serious and systemic failures in AML controls.

“GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013, but it failed to do so. 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,” said Mark Steward, the Executive Director of Enforcement and Market Oversight at the FCA.

Check out iFX EXPO International 2022 session on "Exploring the Dichotomy Between Relevance & Compliance."

GT Bank was Fined Earlier

The regulatory announcement detailed that the bank failed to undertake necessary customer risk assessments. It could not even monitor customer transactions and business relationships to the required regulatory standard.

The lapses in the bank’s operations continued despite the weaknesses being flagged multiple times by internal and external bodies, including the FCA. Moreover, the bank stopped taking new customers in early 2018 and agreed to broader voluntary restrictions on business later that year following concerns raised by the UK regulator. The regulatory requirements were lifted in mid-2021 as a third-party audit confirmed the bank’s completion of a remediation plan.

Meanwhile, the FCA has been imposing hefty fines on financial institutions for their lapses in compliance, mostly around AML practices. Last month, Metro Bank was slapped with a £10 million fine after another £107.7 million fine on Santander UK for AML compliance breaches. The UK regulator also fined Standard Chartered Bank £102.2 million, HSBC Bank £63.9 million, and NatWest £264.8 million.

“Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering,” said Steward. “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. The FCA will continue to take action when these standards are not met.”

The UK’s Financial Conduct Authority (FCA ) has continued its crackdown against anti-money laundering (AML ) lapses and imposed a monetary penalty of more than £7.67 million against Guaranty Trust Bank (UK) Limited (GT Bank).

FCA Fines GT Bank for AML Failures

Announced on Tuesday, the fine came for lapses in the bank’s AML systems and controls between October 2014 and July 2019. The financial penalty would have been £10.9 million, but GT Bank received a 30 percent discount for not disputing the FCA’s findings and agreed to a settlement.

GT Bank, AML, FCA

It was the second such enforcement action faced by GT Bank for AML lapses. The regulator slapped a £525,000 penalty on GT Bank in August 2013 for serious and systemic failures in AML controls.

“GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013, but it failed to do so. 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,” said Mark Steward, the Executive Director of Enforcement and Market Oversight at the FCA.

Check out iFX EXPO International 2022 session on "Exploring the Dichotomy Between Relevance & Compliance."

GT Bank was Fined Earlier

The regulatory announcement detailed that the bank failed to undertake necessary customer risk assessments. It could not even monitor customer transactions and business relationships to the required regulatory standard.

The lapses in the bank’s operations continued despite the weaknesses being flagged multiple times by internal and external bodies, including the FCA. Moreover, the bank stopped taking new customers in early 2018 and agreed to broader voluntary restrictions on business later that year following concerns raised by the UK regulator. The regulatory requirements were lifted in mid-2021 as a third-party audit confirmed the bank’s completion of a remediation plan.

Meanwhile, the FCA has been imposing hefty fines on financial institutions for their lapses in compliance, mostly around AML practices. Last month, Metro Bank was slapped with a £10 million fine after another £107.7 million fine on Santander UK for AML compliance breaches. The UK regulator also fined Standard Chartered Bank £102.2 million, HSBC Bank £63.9 million, and NatWest £264.8 million.

“Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering,” said Steward. “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. The FCA will continue to take action when these standards are not met.”

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