The Financial Conduct Authority (FCA) has fined Gatehouse Bank Plc £1,584,100 for weaknesses in its financial crime systems and controls.
Between June 2014 and July 2017, evidence shows that Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing.
The bank also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs).
Mark Steward, executive director of enforcement and market oversight at FCA, said: “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.”
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.
Due to this severe lack of effective controls, Gatehouse has subsequently taken significant steps to improve its financial crime systems.
Steward added: “The FCA will continue to hold firms to account for poor anti-money laundering systems and controls.”
