London-based GTBank’s ‘particularly egregious’ conduct and serious AML weaknesses lead to US$9.4 million fine

The UK’s Financial Conduct Authority (FCA) has fined Guaranty Trust Bank UK (GT Bank) £7.7 million (US$9.4 million) for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.

The bank provides export, import, standby and back-to-back letters of credit (L/Cs) in keeping with its specialism of providing a range of trade finance and correspondent banking for clients in Africa.

Failure to address weaknesses

The London-based subsidiary of Nigerian multinational financial services institution, Guaranty Trust Bank Holding, failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers according to the FCA. The bank also failed to monitor customer transactions and business relationships to the required standard.

These weaknesses were repeatedly highlighted to GT Bank by internal and external sources, including the FCA, but despite this, the bank failed to take appropriate action to fix them, the UK’s financial services regulator concluded.

Egregious conduct

From early 2018, GT Bank stopped taking on new customers. Later that year, it 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.

The FCA described GT Bank’s conduct as “particularly egregious” as this is not the first time that the bank has faced enforcement action in relation to its AML controls, with the FCA fining GT Bank £525,000 in August 2013 for serious and systemic failings.

Failure to act

The bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so, according to executive director of enforcement and market oversight at the FCA, Mark Steward.

“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,” he concluded.

Further details as well as links to the FCA’s Final Notice to GT Bank and other relevant information concerning the FCA and the bank can be found here.


Categories: Trade Based Financial crimes News

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