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The bank ignored connections to politically exposed persons connected to companies operating from known money laundering jurisdictions
The Financial Conduct Authority has issued a press release announcing that it has fined Standard bank PLC £7.6 million for failing to enforce proper anti-money laundering rules and procedures to ensure that corporate customers are not connected to politically exposed persons (PEPs). This is the first case under new rules that ensures bigger fines after the 6th of March 2010.
According to FCA’s Director of Enforcement and Financial Crime Tracey McDermott one of the main objectives of the regulator is to enhance the integrity of the UK financial system. According to her, banks should be evaluating risks tied to every customer and in the case with Standard such policies have clearly failed.
The bank is not to be confused with Standard Chartered which is a UK based bank. Standard Bank is the UK subsidiary of Standard Bank Group which is one of the biggest banking groups in South Africa. Between December 17th 2007 and July 20th 2011 the bank failed to ensure that appropriate anti-money laundering procedures have been applies to corporate customers related to PEPs.
During the period in question the bank did business with 5339 corporate customers and 282 of them were known to have been related to PEPs. According to the review conducted by the FCA the bank failed to implement adequate anti-money laundering monitoring and provided loans to a significant amount of customers connected to jurisdictions that should generally be considered to be at high risk of stashing dirty money.
The statement concludes announcing that the bank has gotten a 30% rebate with this settlement because it has fully cooperated with authorities and decided to settle at an early stage in the process. Without the rebate the fine would have totaled £10.9 million.
For the full press release visit FCA’s website.