The UK’s Financial Conduct Authority (FCA) announced on Tuesday it has commenced criminal proceedings against National Westminster Bank Plc (NatWest) — formerly Royal Bank of Scotland Group — in respect of alleged offences under the Money Laundering Regulations 2007 (MLR 2007).
Bloomberg News reported that the NatWest customer allegedly involved was Fowler Oldfield, a Bradford-based gold dealer that was shut down after a police investigation in 2016.
“The FCA alleges that NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of MLR 2007 between 11 November 2011 and 19 October 2016,” said the FCA.
“These regulations require the firm to determine, conduct and demonstrate risk sensitive due diligence and ongoing monitoring of its relationships with its customers for the purposes of preventing money laundering.
“The case arises from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest.
“The FCA alleges that increasingly large cash deposits were made into the customer’s accounts.
“It is alleged that around £365 million was paid into the customer’s accounts, of which around £264 million was in cash.
“It is alleged that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.
“NatWest is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021.
“This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.
“No individuals are being charged as part of these proceedings.”
NatWest Group, which remains 62% owned by the UK taxpayer after a bailout in the 2007-09 financial crisis, rebranded from the scandal-tainted Royal Bank of Scotland name last year.
NatWest Group said in a stock exchange statement: “Since being notified of this investigation in July 2017, NatWest Group has disclosed that the FCA was undertaking an investigation into NatWest Group’s compliance with the MLR 2007.
“NatWest Group has been co-operating with the FCA’s investigation to date.
“NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls.”
NatWest CEO Alison Rose told a virtual conference that she was “disappointed” by the FCA charges, Bloomberg reported.
“We have invested very significantly in systems and controls to prevent money laundering,” said Rose.
“We have over 4,000 people across the bank whose job is dedicated to detecting and preventing financial crime and we invested very significantly.”