Financial Crime World

Title: FCA Imposes £5.8m Penalty on Ghana International Bank for AML Lapses in Correspondent Banking

Overview

  • The Financial Conduct Authority (FCA) has penalized Ghana International Bank Plc (GIB) for weaknesses in its anti-money laundering (AML) and counter-terrorist financing (CTF) controls during correspondent banking activities.
  • The penalty amounts to £5.8 million.

FCA Findings (2012-2016)

  • During this period, GIB neglected to conduct sufficient due diligence on potential correspondent banking clients.
  • The bank did not assess their AML controls adequately.
  • Annual reviews of the client list were not conducted.
  • Staff did not receive proper training to investigate suspicious transactions.
  • There was a lack of appropriate policies and procedures for handling AML risks.

Complex Risks in Correspondent Banking

  • The FCA highlights that correspondent banking relationships carry higher risks of money laundering and terrorist financing.
  • Banks need to undertake extra due diligence on their overseas clients to mitigate such risks.

Post-FCA Visit Measures

  • Following the FCA’s visit in December 2016, GIB suspended new correspondent banking client onboarding due to identified concerns.
  • They continue to cooperate with the FCA and an external expert to strengthen their financial crime controls.

No Detected Money Laundering Cases, But Significant Risks

  • No money laundering activities were detected.
  • However, the significant risks due to inadequate systems were considerable.

FCA’s Statement

  • Mark Steward, FCA’s Executive Director of Enforcement and Market Oversight, states that banks play a vital role in preventing financial crime.
  • GIB’s failure to effectively manage risk in its correspondent banking activities fell below the required standards.

FCA: Ensuring Retail Markets Function Well & Protecting Consumers

  • Established as the UK’s independent regulatory body in 2013, the FCA is dedicated to ensuring retail markets operate effectively and protecting consumers.

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