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Release Date: 12th October 2016

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Sonali Bank (UK) Limited (SBUK) £3,250,600 and restricted it from accepting deposits from new customers for 168 days due to significant failings in its anti-money laundering (AML) systems. Additionally, Steven Smith, the bank’s former money laundering reporting officer (MLRO), has been fined £17,900 and prohibited from performing MLRO or compliance oversight functions at regulated firms.

Between 20 August 2010 and 21 July 2014, SBUK failed to maintain adequate AML systems despite receiving clear warnings. The FCA found systemic weaknesses throughout SBUK’s AML controls, affecting senior management, reporting functions, branch oversight, and AML policies and procedures. These failings meant SBUK did not meet its obligations regarding customer due diligence, identification and treatment of politically exposed persons, transaction monitoring, and making suspicious activity reports. As a result, SBUK breached Principle 3 (adequate risk management systems) and Principle 11 (cooperative dealings with regulators) of the FCA’s Principles for Businesses.

Steven Smith, responsible for SBUK’s AML systems from February 2011, failed to establish appropriate monitoring arrangements, identify operational control weaknesses, and properly report issues to senior management. Despite being overworked and lacking sufficient senior management support, his failings were considered serious by the FCA. Smith did not take available steps to escalate concerns internally or to the FCA.

Both SBUK and Smith agreed to settle early, qualifying for a 30% discount on their penalties.

Key Takeaways for Other Firms:

In conclusion, the FCA’s action against SBUK and Steven Smith underscores the importance of robust AML controls and diligent oversight to protect the integrity of the financial system and prevent money laundering activities.

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