Britain’s largest bank for business says it will make a provision in third quarter results to pay a fine
London — NatWest, the first British bank to admit to this type of criminal offense, pleaded guilty to Thursday to failing to prevent nearly PS400m from being laundered.
After a PS45bn bailout and state financial crisis assistance, 55% of the bank is taxpayer-owned. The bank pleaded guilty to three criminal charges for not properly monitoring customer accounts between 2012 & 2016.
“The facts are complicated, and the likely sentence for this case is a very heavy fine,” Clare Montgomery (a lawyer for Financial Conduct Authority, FCA) told Westminster magistrate’s Court.
Montgomery indicated to the court that NatWest could be subject to a possible penalty of around PS340m under sentencing guidelines. However, a judge will determine the amount of any fines later in 2021.
Sara George, a lawyer, stated that the case sent a clear signal to the banking sector to improve anti-money laundering controls and systems.
NatWest, Britain’s largest business bank, stated in a statement that it will make a provision next month in anticipation of a possible fine.
The FCA claimed that NatWest failed to monitor suspicious activity by a client who deposited approximately PS365m in its accounts in five years. Of this, PS264m was in cash.
It said that it would not pursue any former or current employees. NatWest, however, stated it did not expect any other authority to investigate this conduct.
NatWest CEO Alison Rose stated in a statement that she regretted the failure to properly monitor and prevent money laundering by customers.
NatWest stated that it had invested PS700m in money-laundering prevention system over the past five years.
According to court information, a sentencing hearing will be held at a Crown Court higher up on December 7.
This criminal action was first announced by FCA in March. It is the first to be taken against a bank pursuant to a 2007 money laundering statute. This represents a setback for Rose’s efforts to restore the bank’s image.
It is uncommon to prosecute a bank for criminal behavior in Britain. However, it can, unlike any civil action in Britain, threaten the bank’s ability of operation if it is convicted.
The FCA has confirmed that it isn’t aiming to remove NatWest from any banking licenses, which limits the potential fallout.
Neil Williams, Reeds Solicitor’s deputy head for complex crime, stated that compliance departments should be reviewing their procedures in order to comply with the regulations. The FCA’s message is clear: conform or face prosecution.
