Santander UK Plc was fined £108 million ($132 million) by the UK’s financial watchdog for repeated anti-money laundering failures, including a series of missteps in monitoring hundreds of millions of pounds worth of suspect funds.
The bank had “serious and persistent gaps” in its oversight of corporate clients over a five-year period through 2017 and failed to close an account for funneling funds monitored by law enforcement, the Financial Conduct Authority said. Authority in a statement on Friday. .
Santander fully cooperated with the FCA investigation and accepted the watchdog’s findings in exchange for a 30% discount on the fine.
“Santander’s poor management of their anti-money laundering systems and inadequate efforts to address the issues created a long-term and serious risk of money laundering and financial crime,” said Mark Steward, the FCA’s executive director for enforcement and market surveillance.
The fine follows efforts by the regulator to take stronger action against companies that do not closely monitor suspicious funds. The watchdog previously fined HSBC Holdings Plc, Standard Chartered Plc and NatWest Group Plc £431m for mismanagement of their AML systems.
“We are deeply sorry for the historical control issues associated with money laundering,” Mike Regnier, CEO of Santander UK, said in a statement. “We have since made significant changes to address this by reviewing our financial crime technology, systems and processes.”
A business client’s account has seen £269 million pass through in nearly four years, even though it was only opened on monthly deposits of £5,000. And when it was suspected that the account was transferring criminal money, it was not closed.
The owner of the account, ostensibly for a translation service, began transferring significant amounts just months after opening. On three occasions Santander’s teams came to the conclusion that the owner was misrepresenting the true nature of the business, but the bank failed to shut it down.
When police asked to keep the account open, Santander failed to maintain regular oversight and missed another key moment to close the account six months later, the FCA said.
Santander decided in 2017 to undertake an extensive restructuring of its processes and systems, according to the FCA.
Nearly a year ago, the FCA fined NatWest for the offense of failing to prevent money laundering, in a case which learned details of hundreds of thousands of pounds being transported by courier in black bin bags and branch safes full of notes.
Steward, who will leave the FCA in March, has presided over a series of enforcement actions this month, including two fines for market abuse.
–With assistance from Tom Metcalf.
Photo: A Banco Santander SA office building in London on Friday, October 22, 2021. Photo credit: Luke MacGregor/Bloomberg
