Bank and its money laundering reporting officer fined for failing to take heed of warnings

Oliver Gill
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Addressing money laundering is an extremely important issue for the FCA

A Bangladesh state-owned bank has been slapped with a multi-million pound fine by the Financial Conduct Authority (FCA) for "serious and systematic" anti-money laundering failings at its UK arm.

The banking regulator fined Sonali Bank £3.3m, prevented it from accepting new deposits for five and a half months and imposed a penalty of £17,900 on the bank's former money laundering reporting officer, Steven Smith.

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"Despite having previously received clear warnings about serious weaknesses in its anti-money laundering (AML) controls, Sonali Bank failed to maintain adequate AML systems between 20 August 2010 and 21 July 2014.

"The FCA found serious and systemic weaknesses affected almost all levels of its AML control and governance structure," the FCA said in a statement.

Mark Steward, the FCA's director of enforcement and market oversight said that combating money laundering was a matter of "extreme international importance" and added his belief that there is enough guidance and support to help financial services firms comply with regulation. This meant they had no excuse for failing to comply.

"The FCA will not hesitate to take action against firms and senior individuals who fall short of our standards. As in this case, such action may include using our powers to restrict a firm’s continuing business,” he said.

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The individual fine levied on Smith was due to his failure to ensure sufficient controls and systems were in place at Sonali Bank, this was despite repeated warnings from the bank's own internal auditors. "Mr Smith did not have sufficient senior management support and was overworked," the FCA found.

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