Legal
UK Watchdog Fines NatWest £264.7 Million For AML Failings

In its summary of the case, the FCA said that some of the bank’s employees, who were in charge of handling these cash deposits, reported their suspicions to bank staff responsible for investigating suspected money laundering, however no appropriate action was ever taken.
The UK’s Financial
Conduct Authority yesterday fined NatWest £264.7 million
($350.17 million) after the lender was convicted of three
offences of not following anti-money laundering rules.
On 7 October, NatWest pleaded guilty at Westminster
Magistrates Court to criminal charges for the failings.
“It must be borne in mind that although in no way complicit in
the money laundering which took place, the bank was functionally
vital. Without the bank – and without the bank’s failures – the
money could not be effectively laundered,” Mrs Justice Cockerill,
the sentencing judge at Southwark Crown Court, said.
The charges covered NatWest’s failure to properly monitor the
activity of a commercial customer, Fowler Oldfield, a jewellery
business based in Bradford, between 8 November 2012 to 23 June
2016. When taking on the customer, NatWest initially understood
it would not handle cash from the Fowler Oldfield business.
However, over the course of the customer relationship about £365
million was deposited with the bank, of which around £264 million
was in cash, a statement from the FCA said.
Some of the bank’s employees, who handled these cash deposits,
reported their suspicions to bank staff responsible for
investigating suspected money laundering, however no appropriate
action was ever taken, the FCA statement continued. The “red
flags” that were reported included significant amounts of
Scottish bank notes deposited throughout England, deposits of
notes carrying a prominent musty smell, and individuals acting
suspiciously when depositing cash in NatWest branches.
In addition, the bank’s automated transaction monitoring system
incorrectly recognised some cash deposits as cheque deposits. As
cheques carry a lower money laundering risk than cash, this was a
significant gap in the bank’s monitoring of a large number of
customers depositing cash, of which Fowler Oldfield was one, the
statement continued.
A separate investigation by West Yorkshire Police has led to 11
people pleading guilty to charges relating to the cash deposits
and three cash couriers being charged. A further 13 individuals
are awaiting trial at Leeds Crown Court on 25 April 2022 in
relation to the activities of Fowler Oldfield.
“NatWest is responsible for a catalogue of failures in the way it
monitored and scrutinised transactions that were self-evidently
suspicious. Combined with serious systems failures, like the
treatment of cash deposits as cheques, these failures created an
open door for money laundering,” Mark Steward, executive director
of enforcement and market oversight at the FCA, said.
“Anti-money laundering controls are a vital part of the fight
against serious crime, like drug trafficking, and such failures
are intolerable ones that let down the whole community, which, in
this case, justified the FCA’s first criminal prosecution under
the money laundering regulations.”
“Today's hearing brings an end to the case against NatWest and
the FCA has confirmed that, provided no further evidence comes to
light, it will not take action against any individual current or
former employee of NatWest in respect of this case. NatWest is
not aware of, and is not anticipating, any other authority
investigating its conduct in this matter,” NatWest said in a
statement.
NatWest CEO, Alison Rose, said: "NatWest takes its responsibility
to prevent and detect financial crime extremely seriously. We
deeply regret that we failed to adequately monitor one of our
customers between 2012 and 2016 for the purpose of preventing
money laundering. While today's hearing brings an end to this
case, we will continue to invest significant resources in the
ongoing fight against financial crime."