FSA fines Coutts £8.75m over AML failings

FSA fines Coutts £8.75m over AML failings

Coutts, the private bank owned by RBS, has been fined £8.75 million by the Financial Services Authority (FSA) for anti-money laundering systems and controls failings.

The failings with the bank's AML measures for high risk customers were "serious, systemic and were allowed to persist for almost three years," says the watchdog, leading to an "unacceptable" risk of handling the proceeds of crime.

The FSA discovered the issues after visiting Coutts - which counts the Queen among its clients - as part of a thematic review into banks' management of high money-laundering risk situations in October 2010.

The visit led to an investigation which found that Coutts did not apply robust controls when starting relationships with high risk customers and did not then consistently monitor them properly. The FSA found "deficiencies" in nearly three quarters of the 'politically exposed persons' and high risk customer files it looked at.

Tracey McDermott, acting director, enforcement and financial crime, FSA, says: "This penalty should serve as a warning to other firms that, not only should they ensure they constantly review and adapt their controls to changing financial crime risks within their businesses, but that they must also make changes to reflect changing regulatory or other legal standards."

Coutts agreed to settle at an early stage, securing a 30% discount on the fine, which would have been £12.5 million. It has also begun carrying out improvements to its systems.

Last June, having carried out its thematic review, the FSA did warn that it was ready to launch a crack-down on bank anti-money laundering practices after finding serious weaknesses in systems and controls and a willingness among some banks to turn a blind eye to profitable business relationships with high-risk customers and regimes.

Comments: (0)

Visit collinsongroup.com
Visit secure.onespan.com

Trending Stories

Featured Job
All Jobs »