Anthony Darvall Leaves easyMarkets after 15 Years, Launches Startup

FCA Fines Santander UK £108 Million for Prolonged AML Breaches

by Arnab Shome
  • The bank failed to monitor the activities of more than 560,000 business customers properly.
  • The inadequate system was in place for about five years.
Santander
Bloomberg
Join our Telegram channel

The United Kingdom’s Financial Conduct Authority (FCA) has fined Santander UK Plc more than £107.7 million for some severe lapses in anti-money laundering (AML ) controls, the regulator announced on Friday.

The UK unit of Santander failed to properly oversee and manage its AML systems for almost five years, from 31 December 2012 to 18 October 2017. These lapses impacted the oversight of more than 560,000 business customers.

The regulator detailed that Santander’s AML systems in place could not adequately verify the business information provided by the customers. In addition, it failed to properly monitor the expected money into these accounts compared to the actual deposits.

Money-Laundering Risks

The FCA even identified several business banking accounts that Santander failed to identify correctly, including a small translation business that expected monthly deposits of £5,000 but was receiving millions of pounds within six months. Though the bank’s AML team recommended closing the account on March 2014, nothing was done until September 2015. The bank also agreed to FCA’s request in September 2015 to keep the account open but lost track of the regulatory request later.

All of the AML compliance failures led to more than £298 million in transactions before the accounts were closed.

“Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark Steward, the Executive Director of Enforcement and Market Oversight.

Earlier, the FCA imposed heavy penalties on other big banks operating within its jurisdictions. It fined Standard Chartered Bank £102.2 million and HSBC Bank plc £63.9 million. The largest sum of the penalty was £264.8 million against NatWest.

“As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls,” Steward added.

The United Kingdom’s Financial Conduct Authority (FCA) has fined Santander UK Plc more than £107.7 million for some severe lapses in anti-money laundering (AML ) controls, the regulator announced on Friday.

The UK unit of Santander failed to properly oversee and manage its AML systems for almost five years, from 31 December 2012 to 18 October 2017. These lapses impacted the oversight of more than 560,000 business customers.

The regulator detailed that Santander’s AML systems in place could not adequately verify the business information provided by the customers. In addition, it failed to properly monitor the expected money into these accounts compared to the actual deposits.

Money-Laundering Risks

The FCA even identified several business banking accounts that Santander failed to identify correctly, including a small translation business that expected monthly deposits of £5,000 but was receiving millions of pounds within six months. Though the bank’s AML team recommended closing the account on March 2014, nothing was done until September 2015. The bank also agreed to FCA’s request in September 2015 to keep the account open but lost track of the regulatory request later.

All of the AML compliance failures led to more than £298 million in transactions before the accounts were closed.

“Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark Steward, the Executive Director of Enforcement and Market Oversight.

Earlier, the FCA imposed heavy penalties on other big banks operating within its jurisdictions. It fined Standard Chartered Bank £102.2 million and HSBC Bank plc £63.9 million. The largest sum of the penalty was £264.8 million against NatWest.

“As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls,” Steward added.

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}