Guaranty Trust Bank (GT Bank) has been fined £7.7m by the Financial Conduct Authority (FCA) for failings related to money laundering.

An investigation by the regulator found that the bank had serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019.

During this period, the FCA said that GT Bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers. The investigation also found the bank had failed to monitor customer transactions and business relationships to the required standard.

When these weaknesses were highlighted GT Bank, including by the FCA, the firm still failed to take the appropriate action to fix them.

From early 2018, GT Bank stopped taking on new customers and later that year, agreed to wider voluntary restrictions on business, given the FCA’s concerns. Requirements remained in place until the middle of 2021, when they were lifted after the bank had completed a remediation plan, checked by an independent third party.

This is not the first time that the bank has faced enforcement action in relation to its AML controls, after the FCA fined GT Bank £525,000 in August 2013 for serious and systemic failings.

“GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so,” said executive director of enforcement and market oversight at the FCA, Mark Steward. “GT Bank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period.”

The FCA requires firms to have effective AML controls in place to mitigate the risk of individuals and organisations using financial firms to circumvent restrictions designed to prevent them benefitting from assets obtained by illegal means.

“Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering,” Steward added.

“The FCA is determined to ensure the market for financial services is safe, clean and trusted with robust systems and controls in place to stymie financial crime. The FCA will continue to take action when these standards are not met.”

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