Release Date: 23rd June 2022
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Ghana International Bank Plc (GIB) £5,829,900 for significant failings in its anti-money laundering (AML) and counter-terrorist financing controls related to its correspondent banking activities between 1 January 2012 and 31 December 2016. The penalty reflects a 30% discount for early settlement; otherwise, it would have been £8,328,500.
Reasons for the Fine:
- Regulatory Breaches: GIB breached Regulations 14(1), 14(3), and 20(1) of the Money Laundering Regulations 2007 by failing to establish and maintain appropriate risk-sensitive policies, conduct adequate enhanced due diligence (EDD) when establishing new business relationships, and perform adequate enhanced ongoing monitoring.
- Lack of Policies and Procedures: GIB’s AML policies and procedures were fragmented, confusing, and lacked sufficient detail, which hindered staff from effectively performing their roles in preventing money laundering and financial crime.
- Inadequate Due Diligence: GIB failed to gather sufficient information about the purpose and intended nature of business from its respondents and did not perform adequate adverse media checks. Additionally, GIB did not ensure senior management approval for new relationships and failed to document responsibilities adequately.
- Poor Ongoing Monitoring: GIB did not perform full periodic reviews of its respondents as required and failed to scrutinise transactions appropriately using a risk-based approach. In some cases, it took years to identify and address issues with respondents.
Key Takeaways for Firms:
- Establish Comprehensive Policies: Ensure that AML policies and procedures are detailed, clear, and adequately communicated to staff. They should cover all aspects of the business, including correspondent banking.
- Perform Thorough Due Diligence: Collect and analyse sufficient information on potential business partners to assess risks accurately. This includes adverse media checks and obtaining necessary approvals from senior management.
- Regular and Detailed Monitoring: Implement robust ongoing monitoring practices, including periodic reviews and scrutiny of transactions to ensure they align with the expected business profile.
- Respond to Regulatory Guidance: Stay informed about regulatory updates and ensure timely implementation of recommendations to address identified risks, especially in high-risk sectors like correspondent banking.
- Cooperate with Regulators: Engage openly with regulators and take proactive steps to rectify identified shortcomings, including agreeing to business restrictions if necessary to improve compliance.
Conclusion:
Ghana International Bank Plc’s significant failings in AML and counter-terrorist financing controls over its correspondent banking activities led to a substantial fine by the FCA. The case highlights the critical importance of establishing robust AML policies, performing thorough due diligence, and maintaining effective ongoing monitoring to prevent financial crime. Firms must ensure compliance with regulatory standards to protect the integrity and stability of the financial system.
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