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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 imposed a 168-day restriction on accepting deposits from new customers 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.

Despite previous warnings about serious weaknesses in its AML controls, SBUK failed to maintain adequate AML systems between 20 August 2010 and 21 July 2014. The FCA identified systemic deficiencies affecting all levels of SBUK’s AML control and governance, including senior management, the reporting function, branch oversight, and AML policies and procedures. These failings resulted in breaches of Principle 3 (adequate risk management systems) and Principle 11 (cooperative dealings with regulators) of the FCA’s Principles for Businesses.

Steven Smith, as SBUK’s MLRO and compliance officer from February 2011, failed to establish appropriate monitoring arrangements, identify operational control weaknesses, and properly report issues to senior management. He reassured the board that controls were functioning well when they were not, and did not impress upon senior management the need for more resources in the MLRO function.

The FCA emphasised that regulated firms must maintain robust AML systems and that there is abundant guidance on compliance. Mark Steward, Director of Enforcement and Market Oversight at the FCA, highlighted the international importance of effective AML controls and the FCA’s commitment to taking action against firms and individuals who fall short of standards.

Key Takeaways for Other Firms:

In conclusion, the FCA’s action against SBUK and Steven Smith underscores the critical 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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