EFG Fined $6.4 Million by FCA Over Money-Laundering ControlsLindsay Fortado
EFG Private Bank Ltd. was fined 4.2 million pounds ($6.4 million) by the U.K. finance regulator for failing to have effective anti-money laundering controls in place for its high-risk customers.
The serious failings lasted for more than three years, the Financial Conduct Authority said in an e-mailed statement today. The bank, a subsidiary of Zurich-based EFG International Group, didn’t fully implement its anti-money laundering policies, monitor risky accounts, or record how senior management was handling oversight of those customers.
“Banks are the first line of defense to make sure that proceeds of crime do not find their way into the U.K.,” said Tracey McDermott, the FCA’s head of enforcement.
Regulators around the world have cracked down on money laundering after the 2008 financial crisis. The FCA’s predecessor fined Coutts & Co. and Habib Bank Ltd. for similar controls failures.
EFG received the regulator’s standard 30 percent discount for settling early. EFG said it has taken action to make sure its systems and controls are effective. The fine won’t impact its reported profit this year because it has already been provided for, the bank said in an e-mailed statement.
“EFG Private Bank is disappointed that shortcomings were found relating to the period December 2007 to January 2011, even though it has found no evidence that money laundering actually took place,” the bank said. “This is the first time EFG Private Bank has been the subject of disciplinary action.”
EFG’s failings were detected by the FCA’s predecessor, the Financial Services Authority, in 2011 as part of its thematic review on how banks manage money-laundering risks.
The FSA published its findings in 2011 from the review and said they were referring cases to their enforcement division.