The Financial Conduct Authority (FCA) has now initiated criminal proceedings against Natwest bank, following accusations that it has failed to comply with money laundering regulations. This is the first time a criminal money laundering case has been started against the bank.
According to the FCA, Natwest’s systems failed to monitor and scrutiny several transactions. It’s claimed that “increasingly large cash deposits” were made, totaling £365 million. This activity included £264 million in cash payments.
The transactions in question took place between 2011 and 2016, and the watchdog started its investigations shortly after this, in 2017. Natwest has been aware of the case since then.
According to reports, the accusations of failing to prevent or flag potential money laundering activity have been made in connection with a money service business. It is likely to be a company that processes very large amounts of cash regularly.
The penalties the regulators are allowed to give to companies and individuals for breaching the money laundering regulations are high, depending on the severity of the incidents. This is partly due to the scandals in the financial services industry in recent years.
The fines could be tens of millions for the bank. And, the Senior Managers and Certification Regime may also be facing financial penalties, or even a custodial sentence if the FCA believes they were aware of, or should have been aware, of what was happening.
Natwest says it’s been cooperating with the FCA ahead of the court case, which is scheduled to take place at Westminster Magistrates’ Court on the 14th of April. At the moment, no individuals are facing legal proceedings as part of the case.
In a statement, NatWest said it “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”.