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Release Date: 28th March 2013

To access the original FSA document, click here.


EFG Private Bank Ltd was fined £4,200,000 by the Financial Services Authority (FSA) for failing to establish and maintain effective anti-money laundering (AML) systems and controls, specifically regarding high-risk customers, including politically exposed persons (PEPs), from December 2007 to January 2011. This penalty, reduced by a 30% early settlement discount from a potential £6,000,000, reflects significant and systemic weaknesses in EFG’s AML controls.

The bank’s failure involved inadequate identification, assessment, and management of money laundering risks associated with higher-risk customers. The FSA’s investigation revealed that EFG did not consistently perform enhanced due diligence, gather necessary information on the source of wealth and funds, or conduct appropriate ongoing monitoring of higher-risk customers. This lapse allowed an unacceptable risk of handling the proceeds of crime.

Key lessons for other firms include the importance of robust AML systems and controls, particularly for high-risk customers. Firms must ensure they have effective measures to identify and manage potential money laundering risks, conduct thorough due diligence, and maintain vigilant ongoing monitoring to prevent misuse of the financial system for criminal purposes. This case underscores the regulatory focus on financial crime prevention and the heavy penalties for non-compliance, reinforcing the need for continuous evaluation and improvement of AML procedures in financial institutions.

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