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Santander UK has been fined more than £100m after an investigation by the British financial watchdog found “serious and persistent gaps” in its money laundering controls, which resulted in millions of pounds of suspicious transactions through customer accounts.
The Financial Conduct Authority (FCA) imposed fines of £107.7m between December 2012 and October 2017 after the bank failed to “properly monitor and manage” controls affecting the supervision of more than 560,000 business customers, an investigation found.
The FCA said more than £298m passed through the bank’s business accounts which had received “red flags” over suspicious activity that Santander had failed to act on.
Mark Steward, executive director of enforcement and market surveillance at the FCA, said, “Santander’s poor management of its anti-money laundering systems and its inadequate efforts to address the problems created a prolonged and serious risk of money laundering and financial crime.”
The watchdog gave the example of a new business customer who opened an account as a small translation business, expecting monthly deposits of around £5,000, which within six months became a channel for handling millions of pounds. Accounts
The bank’s own anti-money laundering (AML) team recommended closing the account but “weak processes and structures” meant this was not acted upon for 18 months.
Law enforcement then asked Santander to keep the account open to track activity for a month. However, the bank “failed to keep track of this request” and it remained open until the FCA wrote to Santander about activity on the account more than a year later.
“Santander takes its responsibilities regarding financial crime very seriously,” said chief executive Mike Regnier. “We deeply regret the historical anti-money laundering-related control issues in our business banking division between 2012 and 2017.”
The bank said business customers made up just 4% of its entire UK customer base in 2017.
The FCA could have fined Santander as much as £154m. However, the 30% deduction was made after the bank agreed not to dispute its findings and to settle.
“While we took steps to address AML issues after they were identified, we recognize that our framework should have been stronger at that time,” Regnier said. “We have since made significant changes to address this by overhauling our financial crime technology, systems and processes.”
Santander said it now has more than 4,400 staff working to prevent financial crimes.
In December the FCA fined NatWest more than £264m for anti-money laundering failures that included black bin liners full of cash, and sums so large that one branch’s two floor-to-ceiling safes proved “inadequate” to store it all. was done .
Earlier that year, HSBC was fined £64m related to weak money-laundering controls and in 2019 the FCA fined Standard Chartered Bank £102.2m.
“As part of our commitment to preventing and reducing financial crime, we continue to take action against firms that fail to operate appropriate anti-money laundering controls,” Steward said.
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