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FCA Enforcement Action: Guaranty Trust Bank fined £7.6 million for AML control failures

FCA fines Guaranty Trust Bank (UK) Limited £7.6 million for further failures in its anti-money laundering systems and controls

Press Releases First published: 10/01/2023 Last updated: 10/01/2023 

The Financial Conduct Authority (FCA) has fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.

During the relevant period, GT Bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.

The bank also failed to monitor customer transactions and business relationships to the required standard.

These weaknesses were repeatedly highlighted to GT Bank by internal and external sources, including the FCA, but despite this, GT Bank failed to take appropriate action to fix them.

From early 2018 GT Bank stopped taking on new customers. 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.

GT Bank’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.

The 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 benefitting from assets obtained by illegal means.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

‘GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so. GT 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.

Notes to editors

  1. GT Bank is a wholly owned subsidiary of Guaranty Trust Bank Nigeria Limited, which is a wholly owned subsidiary of Guaranty Trust Bank Holding Company Plc., a Nigerian multinational financial services institution that provides a range of banking services across Africa and the United Kingdom. Guaranty Trust Bank Holding Company Plc is a public limited company, listed on both the London and Nigerian stock exchanges.
  2. Final Notice for GT Bank.
  3. On 8 August 2013, the FCA issued a Final Notice and imposed a financial penalty of £525,000 on GT Bank for failing to maintain adequate AML systems and controls between 19 May 2008 and 19 July 2010.
  4. In early 2018, GT Bank suspended onboarding of new customers. In May 2018 a Skilled Person report was produced which highlighted significant deficiencies regarding GT Bank’s AML systems and controls. GT Bank then agreed to the voluntary imposition of wider requirements on its business on 13 November 2018.
  5. Following improvements made to its AML systems and controls, requirements were lifted after GT Bank completed a remediation plan, which was verified by a Skilled Person.
  6. Reducing and preventing financial crime is a key part of the FCA’s three-year strategy to prevent serious harm and set higher standards in financial markets.
  7. Find out more information about the FCA.
FCA Press Release

Link:

FCA Press Release

Categories: Anti-Money Laundering Civil Monetary Penalties Enforcement Actions FCA Updates

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