THE FINANCIAL Conduct Authority (FCA) has handed out its first fine, a £4.2m hit to the UK subsidiary of Swiss bank EFG International for failing to establish effective anti-money laundering controls for its wealthy customers.
The FCA said UK regulators first became seriously concerned about procedures at EFG Private Bank during a spot check on how UK banks were managing money laundering risks in January 2011.
Seventeen EFG customer files opened between December 2007 and January 2011 highlighted “significant money laundering risks” but showed insufficient records of how senior management mitigated those risks, the FCA said.
Of those, 13 related to allegations of criminal activity or showed the customer had been charged with criminal offences.
The bank said it was disappointed that shortcomings had been found between 2007 and 2011, but that it had taken remedial action to ensure its systems and controls were robust. It said the fine would not impact reported profits this year.
EFG fully cooperated with the investigation, qualifying for a 30 per cent discount on a fine that would otherwise have been set at £6m.
City A.M. Reporter