Earlier this month, NatWest pleaded guilty to criminal charges brought by the Financial Conduct Authority (FCA). This was the first criminal prosecution under the UK’s Money Laundering Regulations 2007 (now superseded by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017).
At the proceedings, NatWest accepted that it failed to comply with a series of regulations that require financial institutions to have adequate anti-money laundering systems and controls to prevent money laundering in place.
As a result of the guilty plea, the case has been sent to Southwark Crown Court for sentencing. NatWest now potentially faces a fine of up to £340 million.
What happened?
NatWest failed to properly monitor the accounts of Fowler Oldfield, a century-old jeweler based in Bradford that was shut down following a police raid in 2016. According to the Crown Court proceedings that followed the raid, the firm was described as being at the ‘center of a multimillion-pound money laundering business’.
Speaking at Westminster Magistrates’ Court, FCA prosecutor Clare Montgomery QC said that when NatWest took Fowler Oldfield on as a client, its predicted turnover was £15 million a year. However, the company deposited £365 million in just under five years. At its height, Fowler Oldfield deposited up to £1.8 million a day.
She said: “The turnover of Fowler Oldfield was predicted to be £15 million per annum. It was agreed that the bank would not handle cash deposits. However, it deposited £365 million, with around £264 million in cash.”
In pleading guilty, NatWest said its failures “included weaknesses in some of the bank's automated systems as well as certain shortcomings in adherence to monitoring and investigations procedures.”
Speaking about the case, NatWest’s chief executive, Alison Rose, said: “NatWest has a vital part to play in detecting and preventing financial crime and we take extremely seriously our responsibility to prevent money laundering by third parties. In the years since this case, we have invested significant resources and continue to enhance our efforts to effectively combat financial crime.”
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