The Financial Conduct Authority (FCA) has fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.
During the relevant period, GT Bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.
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, GT Bank failed to take appropriate action to fix them.
From early 2018 GT Bank stopped taking on new customers. 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’s conduct is 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.
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.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
'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.
'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. The FCA will continue to take action when these standards are not met.'
GT Bank has not disputed the FCA’s findings and agreed to settle, which means it has qualified for a 30% discount. Without this discount, the financial penalty would have been £10,959,700.