The FCA has commenced criminal proceedings against NatWest over alleged money laundering offences.

The proceedings are in respect of offences under the Money Laundering Regulations 2007 (MLR 2007).

This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.

The regulator has alleged that NatWest failed to adhere to the requirements of three regulation rulings under the MLR 2007, between 11 November 2011 and 19 October 2016.

These regulations required the firm to determine, conduct and demonstrate risk sensitive due diligence and ongoing monitoring of its relationships with customers, for the purposes of preventing money laundering.

An FCA statement said: “The case arises from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest. The FCA alleges that increasingly large cash deposits were made into the customer’s accounts. It is alleged that around £365m was paid into the customer’s accounts, of which around £264m was in cash.

“It is alleged that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.”

The regulator confirmed that no individuals are being charged as part of the proceedings, with NatWest scheduled to appear at Westminster Magistrates’ Court on 14 April 2021.

CEO of the anti-money laundering specialist SmartSearch, John Dobson, commented: “What is being alleged is a failing on a massive scale, with astonishing amounts of cash involved, and it highlights that no business or bank is too big to fall victim to fraud.

“I think it also suggests that they should have listened to the advice coming out of the market, but a bank the size of NatWest often believes they don’t need to hear it.

“If the criminal case is proved, they could face fines of tens of millions of pounds, or even custodial sentences against individuals. So, it will be interesting to see how far the FCA is willing to go to make an example of NatWest and bring to bear the full force of its prosecuting authority.”

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