Coutts has received an £8.75 million fine for breaching Principle 3 of PRIN and the SYSC rules in relation to inadequate antimoney laundering systems and controls. For a period of almost three years, between December 2007 and November 2010, Coutts failed to establish or maintain adequate and effective AML systems for customers that posed a high money laundering risk.
Coutts failed to assess the level of the money laundering risk posed by existing customers and prospective high risk customers, including failing to identify all politically exposed persons (PEPs). The AML team at Coutts also failed to provide an appropriate level of scrutiny and challenge and did not consistently apply appropriate ongoing monitoring to its existing high risk customers to ensure that changes in their risk profiles were assessed and managed appropriately.
Tracey McDermott, acting director of enforcement and financial crime, said: “Coutts’ failings were significant, widespread and unacceptable. Its conduct fell well below the standards we expect and the size of the financial penalty demonstrates how seriously we view its failures.”
Since the FSA identified these failings, a number of improvements in their AML systems have already been implemented at Coutts.