UK Fines GTBank £7.6m over Money Laundering Controls

The Financial Conduct Authority (FCA) a financial watchdog has fined the United Kingdom unit of Nigeria’s Guaranty Trust Bank (GTB) £7.6 million ($9.3 million) for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.

According to a statement on Tuesday, GTBank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.

It said the bank also failed to monitor customer transactions and business relationships to the required standard, saying these were repeatedly highlighted to GTBank by internal and external sources, including the FCA.

Despite this, GTBank failed to take appropriate action to fix them. FCA stated that from early 2018 GTBank stopped taking on new customers. However, later that year GT Bank agreed to wider voluntary restrictions on business, given the FCA’s ongoing concerns.

Requirements remained in place until the middle of 2021 when they were lifted after the bank completed a remediation plan, checked by an independent third party, according to the regulator.

“GTBank’s conduct is particularly egregious as this is not the first time that the bank has faced enforcement action in relation to its AML controls, with the FCA fining GT Bank £525,000 in August 2013 for serious and systemic failings”.

It reiterates that FCA requires firms to have in place effective AML controls to mitigate the risk of individuals and organisations using financial institutions to circumvent restrictions designed to prevent them from benefitting from assets obtained by illegal means.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: ‘GTBank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so”.

Steward added that the bank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period.

‘Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering. The FCA is determined to ensure the market for financial services is safe, clean and trusted with robust systems and controls in place to stymie financial crime. The FCA will continue to take action when these standards are not met.’

GT Bank has not disputed the FCA’s findings and agreed to settle, which means it has qualified for a 30% discount. Without this discount, the financial penalty would have been £10,959,700.

Reacting to the fine, Gbenga Alade, managing director of GT Bank UK, said the bank takes its anti-money laundering obligations extremely seriously and noted the FCA’s findings with sincere regret, adding that the FCA found no instances of suspected money laundering.

“We would like to assure all our stakeholders and the general public that necessary steps have been taken to address and resolve the identified gaps,” Alade said in a statement. #UK Fines GTBank £7.6m over Money Laundering Controls.