Ghana International Bank (GIB) was penalized by the UK's Financial Conduct Authority (FCA) £5.8 million (€6.7 million) for lax AML/CFT controls over its correspondent banking activities.
When GIB established relationships with foreign banks between January 2012 and December 2016, it did not "adequately perform the additional checks required" and "failed to demonstrate it had assessed those banks’ anti-money laundering controls."
Foreign banks can offer goods and services, such as making payments in various currencies and across international borders, thanks to GIB's correspondent banking services.
The FCA claims that in order to reduce the "higher risk of money laundering and terrorist financing" connected to the services offered, banks must perform "extra checks" on their correspondent banking clients.
The FCA visited GIB in December 2016 to review its financial crime controls, and as a result of the issues found, GIB voluntarily decided not to accept any new clients.
This course of action is maintained while the GIB continues to strengthen its FinCrime controls by collaborating with the Financial Conduct Authority and outside experts.
Even though "no evidence of actual money money laundering was detected," the FCA stated that there was a sizable risk of money laundering as a result of the identified flawed systems.
The bank qualified for a 30 percent fine reduction, with the original fine set at £8.3M, as a result of GIB's agreement to settle as soon as possible.
"Firms are gatekeepers of the financial system and have vital obligations to ensure they are not used to facilitate or perpetrate financial crime," said Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, in a statement.
"These failings meant that GIB was unable to identify and assess the risks posed by its correspondent bank customers and properly scrutinise transactions worth £9.5BN processed on their behalf during the relevant period," the executive continued.
According to Mr. Steward, "ensuring firms strengthen their anti-money laundering controls and enforcing failures to comply remain high priorities for the FCA."
By fLEXI tEAM