The FSA found 17 customer files opened between December 2007 and January 2011 contained due diligence which highlighted significant money laundering risks but insufficient records of how the bank had mitigated those risks.
The Bank was also found to have inappropriately monitored its higher risk accounts. The FSA reviewed the files of 99 politically exposed persons (PEPs) and of these 83 raised serious concerns.
Tracey McDermott, head of enforcement and financial crime at the FCA, said: “Banks are the first line of defence to make sure that proceeds of crime do not find their way into the UK. In this case while EFG’s policies looked good on paper, in practice it manifestly failed to ensure that it was addressing its AML risks. Its poor implementation of its agreed policies risked the bank handling the proceeds of crime. These failures merited a strong penalty from the FCA.”
The Zurich-headquartered bank is a division of EFG International, and it has offices in the UK and across Europe. It launched a UK-based asset management arm in 2011.
It settled at an early stage and qualified for a 30% discount on the fine; without the discount it would have amounted to £6m.
Not the first
A number of UK banks were fined last year for breaching money laundering laws, including Coutts which was subject to a record £8.75m fine by the FSA for serious and sustained failure to protect from occurrences of money laundering.
The US authorities also fined several UK banks, including HSBC which was fined $1.9bn, as part of a crackdown. The table shows notable money laundering fines to have been handed out over the past few years.
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