These failings are particularly serious as they affected customers based in countries associated with a higher risk of money laundering, bribery or corruption, including accounts held by politically exposed persons (PEPs).
GT Bank, a subsidiary of Nigerian Guaranty Trust Bank PLC, opened an office in London in May 2008 offering retail and wholesale banking products and services to private, corporate and institutional clients.
The FCA’s predecessor, the Financial Services Authority (FSA), reviewed GT Bank’s controls as part of a thematic review into banks’ management of money-laundering risks in 2010. The review of GT Bank raised significant concerns and after further investigation, the FCA found that GT Bank failed to establish effective AML policies and procedures when they established their UK operations. This included failures to:
- Assess or document potential money-laundering risks posed by higher risk customers
- Screen prospective customers against sanction lists or databases of PEPs
- Obtain and/or document senior management approval to establish a business relationship with PEPs
- Establish the purpose and intended nature of prospective customers’ accounts or the sources of higher risk customers’ wealth or funds
- Review the activity of higher risk customers’ accounts and check that the information they held on these customers was up to date.
As a result, GT Bank was not able to fully understand or assess their higher risk customers’ activities. This breached FCA Principle 3, which requires firms to take reasonable care to organise and control their affairs responsibly and effectively, and a number of our rules on systems and controls.
FCA press release link: click here