Gatehouse Bank has been fined £1.5m by the FCA for “significant weakness” in its financial crime systems and controls.
The regulator found that between 2014 and 2017, Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing.
Gatehouse also failed to undertake the correct checks when some of the customers were classed as politically exposed persons, the FCA added.
In one instance, Gatehouse set up an account for a company based in Kuwait to aggregate customer funds. The Bank did not require the company to collect information about customers’ source of funds or wealth, which was required under Gatehouse’s anti-money laundering policies.
As a result, over a two-year period, Gatehouse accepted US$62m into the account without properly vetting the funds for financial crime risks. The FCA said that this example illustrated the risks of failing to have proper systems and controls.
“Gatehouse’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds,” commented FCA executive director of enforcement and market oversight, Mark Steward.
“While not deliberate, there can be no excuse for failures as serious as this. The FCA will continue to hold firms to account for poor anti-money laundering systems and controls.”
Gatehouse has since taken significant steps to improve its financial crime systems and controls.
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