The Financial Conduct Authority (FCA) has fined Gatehouse Bank Plc £1,584,100 for significant weakness in its financial crime systems and controls.
Between June 2014 and July 2017 Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing. Gatehouse also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs).
In one instance, Gatehouse Bank set up an account for a company based in Kuwait to aggregate customer funds. Gatehouse Bank did not require the company to collect information about customers’ source of funds or wealth, which was required under Gatehouse’s anti-money laundering policies. As a result, over a two-year period, Gatehouse accepted US$62,000,000 into the account without properly vetting the funds for financial crime risks. This example illustrates the risks of failing to have proper systems and controls.
Gatehouse has subsequently taken significant steps to improve its financial crime systems and controls.
Mark Steward, Executive Director of Enforcement and Market Oversight, commented:
‘Gatehouse Bank’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds. While not deliberate, there can be no excuse for failures as serious as this. The FCA will continue to hold firms to account for poor anti-money laundering systems and controls.’