Global: Gatehouse Bank handed £1.5m fine by FCA over “poor” AML checks

The UK’s Financial Conduct Authority (FCA) has slapped Gatehouse Bank with a £1.5 million fine citing “significant weakness” in its anti-money laundering (AML) checks.

Gatehouse Bank fined £1.5m

The regulator says that the bank “failed 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 FCA describes an example wherein Gatehouse Bank set up an account for a Kuwait-based company 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,” it says.

“As a result, over a two-year period, Gatehouse accepted $62 million into the account without properly vetting the funds for financial crime risks.”

It adds that the bank has subsequently taken “significant steps” to improve its financial crime systems and controls.

“Gatehouse Bank’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds,” says Mark Steward, executive director of enforcement and market insight at the FCA.

“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.”

The FCA says Gatehouse Bank agreed to settle at an “early stage of the investigation”, which led to a 30% reduction to the original penalty of £2.2 million.