The UK’s Financial Conduct Authority (FCA) has announced that it has commenced criminal proceedings against National Westminster Bank Plc (NatWest) in respect of offences under money laundering regulations enacted in 2007.
This is the first criminal prosecution under the act by the FCA and the first prosecution under the act against a bank.
Allegations
The FCA alleges that NatWest failed to adhere to requirements of three regulations between 2011 and 2016.
These regulations required the bank to determine, conduct and demonstrate risk sensitive due diligence and ongoing monitoring of its relationships with its customers for the purposes of preventing money laundering.
Case outline
The case arises from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest. The FCA alleges that increasingly large cash deposits were made into the customer’s accounts. It is alleged that around £365 million (US$504 million) was paid into the customer’s accounts, of which around £264 million was in cash.
It is also alleged that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.
No individuals are being charged as part of these proceedings and NatWest is scheduled to appear at in court in April.
Watchdog under fire
Despite having the power to bring criminal proceedings, the UK’s financial services watchdog has come under some criticism and has so far only imposed fines.
Last year the FCA abandoned half of its inquiries into money laundering breaches and embarked on a series of reforms aimed at making the regulator more effective (Trade-based Financial Crime, 21 December 2020).
Categories: Trade Based Financial crimes News
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