State-owned NatWest slapped with £265m money laundering fine
State-owned bank NatWest has today been slapped with a £265m fine for failing to stop millions of pounds of dirty money flowing through its system.
The judgement concludes the first money laundering case against a British lender.
The verdict sparked speculation among City expects over whether it will prompt global regulators to pursue other financial services firms that are suspected to have breached their anti money laundering obligations.
“Today’s fine, while eye watering for NatWest, is a clear and large reminder of the price that has to be paid if a corporate is found to have failed to meet its money laundering obligations,” Aziz Rahman, senior partner at Rahman Ravelli, said.
“The ripples from this are likely to be felt far and wide across the financial world. The shock waves could be as far-reaching as those that came out of the Danske Bank scandal.”
Sara George, partner at Sidley, told City PM: “The shift away from imposing regulatory sanctions in the NatWest case to criminal prosecution demonstrates [the FCA’s] commitment to employing a fuller spread of their enforcement powers to tackle anti-money laundering offences.”
The fine was expected to be much higher, around £350m, but was reduced in a ruling at Southwark Crown Court today due to NatWest’s guilty plea.
The penalty comes after the UK’s City watchdog said a criminal gang channelled millions of pounds into 50 NatWest branches.
At least one branch of the British lender held around £40m in dirty money, the Financial Conduct Authority (FCA) has revealed.
Criminals walked through the streets of Walsall with bags of money and deposited them at a NatWest branch in the west-midlands town, the FCA said.
One person in Walsall arrived at a branch with so much cash in bin bags that they broke and the money had to be repacked.
The comments from the FCA were given to a judge before NatWest was sentenced for breaches of money laundering law.
Earlier this year, NatWest became the first British lender to admit to breaches of money laundering law.
The bank admitted to failing to monitor suspect activity by a client that deposited over £360m over five years, including £264m in cash.
The customer was Fowler Oldfield, a gold dealer liquidated after a police raid in 2016.
NatWest chief executive Alison Rose has apologised for the bank’s weak oversight, saying “we deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers.”