NatWest faces FCA money laundering charge over £365m account
NatWest is facing criminal proceedings from the UK’s Financial Conduct Authority (FCA) after it was found in breach of money laundering laws.
The bank has become the first to face criminal proceeding under the UK’s 2007 Money Laundering Regulations (MLR).
The bank will appear before Westminster Magistrates’ Court next month
Such regulations require banks to monitor customers and determine risk in an effort to prevent instances of money laundering on their platforms.
The FCA says the bank broke the rules between 11 November 2011, and 19 October 2016.
£264 million in cash for one customer
For a nearly five-year period, NatWest handled suspicious funds deposited into accounts operated by a UK-based customer.
The FCA alleges “increasingly large cash deposits were made into the customer’s accounts” during this time. It adds that around £365 million was paid in, with some £264 million of this in cash.
The regulator has therefore accused NatWest’s systems and controls of failing “to adequately monitor and scrutinise this activity”, under regulation 45 of the law.
The bank will appear before Westminster Magistrates’ Court next month, 14 April. No individuals are involved in the charges against the bank, and it’s unclear under which division of NatWest that the breach happened.
The FCA notified NatWest of its investigation back in July 2017. The bank says it has been cooperating with it since.
It said in a statement: “NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant multi-year investments in its financial crime systems and controls.”
AML fines on all-time rise
Anti-money laundering (AML) fines set new records in 2020. Globally, firms parted with some $10.4 billion over breaches. They span financial crime, the Second Markets in Financial Instruments Directive (MiFID II), and data privacy.
That’s according to Fenergo data. There’s also been a 26% rise in fine amounts, and the volume of fines has increased.
It’s as yet unclear the size of the fine NatWest could face for its latest breach.
Rachel Woolley, global financial crime director at Fenergo, said on a panel attended by FinTech Futures in December that prosecution on an individual level needs reassessing.
She pointed out that the average individual fine in 2020 globally was just $20,000. “Either the individuals aren’t senior enough, or they are, but these penalties aren’t making much of a dent their paycheques.”
Read next: Fear of enforcement uptick just compliance theatre, says AML panel
