FIN.

FCA fines SCB £100m for AML failings

FCA has imposed its second largest ever fine for AML controls failings. It has fined Standard Chartered Bank £102.2m for failings in its wholesale bank correspondent banking business and its branches in the UAE.  It published its fine as the US authorities also took action against the group for breach of US sanctions.

FCA found the bank:

  • did not have in place proper systems for internal assessment of the adequacy of its AML controls; and
  • had shortcomings in the way in which it approached identifying and mitigating material money laundering risks and how it escalated risks.

The failings meant the bank was at increased risk of both receiving or laundering the proceeds of crime and of breaching sanctions.

The failings occurred between 2009 and 2014 and so FCA took action under several provisions of the MLR 2007. It noted several specific examples of significant shortcomings, such as opening an account with a large amount of UAE Dirham in cash with little evidence of investigation of source of funds, failing to collect enough information about a product that could have military application and not reviewing due diligence on a customer despite repeated red flags being raised against it.

FCA said it had taken into account the bank’s remediation work and co-operation with both FCA and international investigations. The bank also accepted FCA’s findings and qualified for a 30% discount, while asking the RDC to assess the appropriate level of sanction.

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Emma Radmore