Bank investigated

NatWest facing criminal action over money laundering

Bank under investigation

The City watchdog has launched criminal proceedings against state-backed bank NatWest (RBS) for allegedly failing to comply with money laundering rules.

The Financial Conduct Authority has notified NatWest Group that it is pursuing the bank for alleged offences between 11 November 2011 and 19 October 2016, arising from the handling of the accounts of a UK incorporated customer. 

The regulator added that the case arises from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest.

About £365m was allegedly paid into the customer’s accounts, of which around £264m was in cash. It is claimed the bank’s systems and controls failed to adequately monitor and scrutinise the activity.

Since being notified of this investigation in July 2017, NatWest Group, operating north of the border as Royal Bank of Scotland, has disclosed that the FCA was undertaking an investigation into its compliance with the money laundering regulations 2007. NatWest Group has been co-operating with the FCA’s investigation to date.

NatWest Group said it 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 is due to appear at Westminster Magistrates’ Court on 14 April.

It marks the first time the FCA has launched criminal prosecution under the money laundering regulations and the first time the rules have been used to prosecute a bank.

The FCA said the money laundering rules require firms 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”.

No individuals are being charged as part of the proceedings.

NatWest Group is 62% owned by the Government after a taxpayer bailout at the height of the financial crisis.

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