GTB UK fined £7.7m for money laundering control failures

The Financial Conduct Authority (FCA), the UK's financial services industry regulator, has imposed monetary penalties totaling £7.7 million on the UK unit of Guaranty Trust Bank (GTB) "for serious weaknesses in its fight against money laundering (AML) between October 2014 and July 2019," the watchdog said in a statement on Tuesday.

The penalty signals the second time the lender would face punitive action over AML checks, having faced a £525,000 fine in August 2013 "for serious and systemic breaches".

FCA noted that GTB failed to meet the requirement to track customer transactions and business relationships to the expected standard, adding that insiders and outside sources continually reported the flaws to GTB, which s refrained from taking action to remedy it.

The financial institution stopped recruiting new customers from the start of 2018, according to the FCA, the year in which GTB agreed to broader voluntary limitations on business amid continued concerns regulator.

"'GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013, but it did not. GT Bank did not develop a plan to address its weaknesses in the fight against money laundering, exposing it and the wider market to financial crime risks for an extended period of time,” said Mark Steward, FCA's Executive Director, Enforcement and Market Oversight.

""Companies need to protect themselves and their relationships from the risks of financial crime, especially money laundering. The FCA is committed to ensuring that the financial services market is safe, clean and reliable with robust systems and controls in place to thwart financial crime. »

The document states that "GT Bank has not contested the FCA's findings and has agreed to settle, meaning it is entitled to a 30% discount."

The fine would have been around £11 million had it not been discounted.

The watchdog, which regulates the conduct of 50,000 businesses in the country, expects functional AML controls to be put in place by the companies it oversees to curb threats from people and organizations using financial services companies to circumvent controls designed to prevent them from illicitly profiting from acquired assets.

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Gbenga Alade, Managing Director of GTBank UK, assured stakeholders and the general public that the necessary steps had been taken to address and resolve the shortcomings identified.

"As a responsible financial services institution committed to best practice, GTBank UK takes its AML obligations very seriously.

"We note with sincere regret the FCA's findings regarding AML screening deficiencies in our past operations and we are truly sorry," he said.

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