Challenger bank penalised for poor anti-money laundering checks
The Financial Conduct Authority (FCA) has fined Gatehouse Bank £1,584,100 for failure to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing between June 2014 and July 2017.
The regulator said Gatehouse also failed to undertake the correct checks when some of the customers were classed as politically exposed persons (PEPs). In one instance, the bank set up an account for a company based in Kuwait to aggregate customer funds, and 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 million into the account without properly vetting the funds for financial crime risks. This example, the FCA said, illustrates the risks of failing to have proper systems and controls.
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“Gatehouse Bank’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds,” Mark Steward, FCA executive director of enforcement and market oversight, commented. “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,” Steward assured.
The conduct regulator reported that Gatehouse has subsequently taken steps to significantly improve its financial crime systems and controls.