NatWest has been fined £264.8m by the FCA for failing to comply with money laundering regulations.

This is the first time the FCA has pursued criminal charges for money laundering failings, after NatWest pleaded guilty at Westminster Magistrates Court in October.

Charges covered NatWest’s failure to properly monitor the activity of a jewellery business based in Bradford, Fowler Oldfield, between November 2012 and June 2016. When taking on the customer, NatWest initially understood it would not handle cash from the Fowler Oldfield business. However, the FCA found that over the course of the customer relationship approximately £365m was deposited with the bank, of which around £264m was in cash.

Furthermore, the bank’s automated transaction monitoring system incorrectly recognised some cash deposits as cheque deposits, the FCA said. As cheques carry a lower money laundering risk than cash, this was a significant gap in the bank’s monitoring of a large number of customers depositing cash, of which Fowler Oldfield was one.

FCA executive director of enforcement and market oversight, Mark Steward, commented: “NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious. Combined with serious systems failures, like the treatment of cash deposits as cheques, these failures created an open door for money laundering.

“Anti-money laundering controls are a vital part of the fight against serious crime, like drug trafficking, and such failures are intolerable ones that let down the whole community, which, in this case, justified the FCA’s first criminal prosecution under the money laundering regulations.”

A separate investigation by West Yorkshire Police has led to 11 people pleading guilty to charges relating to the cash deposits and three cash couriers being charged. A further 13 individuals are awaiting trial at Leeds Crown Court in April 2022 in relation to the activities of Fowler Oldfield.

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