NatWest pleaded guilty this morning at Westminster Magistrates’ Court to three counts of failing to comply with anti-money laundering legislation.
The bank admitted failing to comply with laws over “large cash deposits” into a sole customer’s accounts.
The firm pleaded guilty at Westminster Magistrates’ Court on Thursday to three counts under regulation 45(1) of the Money Laundering Regulations 2007, after failing to monitor the accounts of a UK incorporated customer.
Banking regulator the Financial Conduct Authority (FCA), in setting out the charges, previously said that “increasingly large cash deposits” were made into the customer’s account.
NatWest CEO apologises
NatWest chief executive Alison Rose (pictured above) said this morning: “We deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers between 2012 and 2016.
NatWest has a vital part to play in detecting and preventing financial crime and we take extremely seriously our responsibility to prevent money laundering by third parties.Natwest GroupM CEO Alison Rose
“In the years since this case, we have invested significant resources and continue to enhance our efforts to effectively combat financial crime. We work tirelessly with colleagues, other banks, industry bodies, law enforcement, regulators, and governments to help find collaborative solutions to this shared challenge,” Rose continued.
“These partnerships are crucial to counter the significant and evolving threat of financial crime to society.”
Despite financial institutions paying around £598m in enforcement action penalties since the financial crash in 2008, the criminal prosecution was the first of its kind for a City-based bank since the introduction of the UK Money Laundering Regulations nearly 14 years ago.
The case arose from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest.
The FCA said that large cash deposits of around £365m were paid into the customer’s accounts, of which around £264m was in cash.
Some observers believe the FCA’s prosecution may be indicative of activity to come for financial institutions that are subject to regulatory activity and investigations, particularly since the UK is often cited as “the money laundering capital of the world,” with an estimated £90bn laundered through the City of London every year, according to figures from the UK’s National Crime Agency.
A central problem has been the use and misuse of anonymous companies – mostly LLPs and LPs incorporated through Companies House – by people with ties to corruption, crime and even terrorism.