Ghana International Bank fined £5.8m by UK regulator

The regulator of financial services firms and financial markets in the UK, the Financial Conduct Authority (FCA), has fined Ghana International Bank (GIB) £5.8 million for breaching controls against money laundering and the financing of terrorism.

The FCA, in a notice of decision, today said the GIB failed to establish and maintain appropriate and risk-sensitive policies and procedures; perform adequate enhanced due diligence when establishing new business relationships and perform adequate enhanced ongoing monitoring of transactions.

The FCA said the breaches relate to the GIB’s anti-money laundering and anti-terrorist financing controls over its correspondent banking business during the period from January 1, 2012 to December 31, 2016 ( the “relevant period”).

“During the relevant period, the monetary value of funds flowing between GIB and its sponsoring bank clients, net of transfers between clients’ own accounts and term deposits, amounted to £9.5 billion” , indicates the decision.

Discount on the original fine

The notice did not contain the detection of actual money laundering at the bank but stated that “the breaches created a significant risk that financial crime would be facilitated, caused or occurred”.

The FCA added that the GIB had agreed to resolve the issue and was entitled to a 30% discount.

“Without this remission, the Authority would have imposed a financial penalty of £8,328,500 on GIB,” the notice read.

“This restriction remains in place. GIB continues to work with the FCA and an independent expert to improve its financial crime controls,” the FCA said.

Results

In a separate statement, the FCA said the GIB provides correspondent banking services to foreign banks. This has enabled GIB to provide products and services that it would not otherwise be able to provide, including making payments in different currencies and across borders.

The FCA requires banks to carry out additional checks on their correspondent banking customers to reduce the higher risk of money laundering and terrorist financing associated with the service.

“However, between January 1, 2012 and December 31, 2016, GIB failed to adequately perform the additional checks required when establishing relationships with foreign banks and did not demonstrate that it had assessed the anti-money laundering checks on these banks,” the statement said.

“GIB also failed to undertake annual reviews of the information it held on the banks with which it had relationships, failed to provide staff with adequate training on how to properly review transactions and did not ‘has not established appropriate personnel policies and procedures’.

In December 2016, the FCA visited GIB to review its financial crime controls.

Following concerns identified during this visit, GIB has voluntarily agreed not to take on new clients.

“This restriction remains in place. GIB continues to work with the FCA and an independent expert to improve its financial crime controls,” the statement said.

No evidence of actual laundering by GIB

The statement said no evidence of actual money laundering was detected, although the risk of money laundering resulting from these flawed systems is significant.

“GIB did not contest the FCA’s findings and agreed to settle as soon as possible, which meant he was eligible for a 30% discount. Otherwise, the FCA would have imposed a financial penalty of 8,328,500 £”.

Mark Steward, Executive Director of Enforcement and Market Surveillance at the FCA, said: “Companies are the guardians of the financial system and have vital obligations to ensure they are not used to facilitate or perpetrate financial crime.These failures meant that GIB was unable to identify and assess the risks posed by its correspondent banking clients and properly review transactions worth £9.5bn processed on their behalf during the reporting period. Ensuring companies strengthen their anti-money laundering controls and enforcing compliance breaches remain high priorities for the FCA.”

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