NatWest Bank has come under criminal investigation from the Financial Conduct Authority (FCA) for allegedly failing to comply with money laundering rules.
The State-controlled bank allowed increasingly large cash deposits to be lodged in a customer’s account without triggering an alert, according to the FCA.
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NatWest, which is 62% owned by the taxpayer, watched some £365m being paid into the customer’s accounts, of which £264m was in cash, the regulator claims.
It is the first time the FCA has ever launched a criminal prosecution under the 2007 Money Laundering Regulations and the first time the rules have been used to prosecute a bank.
The prosecution is being brought under regulation 45 of the rules which require firms such as NatWest to maintain adequate and effective anti-money laundering systems and controls.
“The purpose of MLR 2007 is to ensure firms take all reasonable steps to prevent their use for money laundering purposes,” the FCA says.
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By GlobalDataNo individuals are being charged
“It is alleged that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity,” the regulator says.
The bank is scheduled to appear at Westminster Magistrates’ Court on 14 April. No individuals are being charged in the case.
It said the alleged failures—which took place between 11 November 2011 and 19 October 2016—occurred over the handling of the accounts of a UK incorporated customer.
In a statement, NatWest says it was notified of the investigation in July 2017 and has been cooperating.
“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,” the bank says.
A reputation that is hard to shake off
Over the years, the City of London has been battling with its reputation as a hub for global money laundering.
Anti-corruption campaigners claim that billions of pounds continue to flow through the UK financial system from ill-gotten gains made by criminals and corrupt officials from overseas.
While successive governments have clamped down on lax practices, prosecutions for money laundering remain extremely rare.
Last year, the UK treasury department released a report called “National risk assessment of money laundering and terrorist financing 2020”.
The report indicated that the UK’s financial system is flawed as it helps those with black money.
