Serious shortcoming in anti-money-laundering checks over a three-year period have led to a fine of £1,584,100 ($1,786,581) for Gatehouse Bank from the Financial Conduct Authority (FCA).
The regulator found that the bank failed to conduct sufficient checks on customers from countries with a higher risk of money laundering and terrorist financing, and failed to carry out the correct checks when customers were classed as Politically Exposed Persons.
In one example, $62m was accepted into an account Gatehouse had set up for a Kuwait-based company to aggregate customer funds without requiring the company to gather information on the source of customers’ wealth. This was a requirement of Gatehouse’s own anti-money-laundering policies.
The bank has subsequently taken steps to improve its systems and controls, and its decision to settle the investigation early gained it a 30% reduction on the original penalty of £2,263,084 ($2,552,353).
“Gatehouse Bank’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds,” said Mark Steward, Executive Director of Enforcement and Market Oversight. “While not deliberate, there can be no excuse for failures as serious as this. The FCA will continue to hold firms to account for poor anti-money-laundering systems and controls.”