GTBank Settles With UK Govt After N4.16bn Fine For Money Laundering

Guaranty Trust Bank (GTBank UK) said it has reached a settlement with the Financial Conduct Authority (FCA), after accepting findings in relation to historical Anti-Money Laundering (AML) controls in its operations from October 2014 to July 2019.

The Eagle reports earlier that Britain’s financial watchdog fined the UK subsidiary of GTBank 7.6 million pounds ($9.3 million) for what it said were further failures in its anti-money laundering systems and controls, Reuters disclosed.

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The bank cooperated fully with the FCA’s investigation and has agreed to a penalty sum of GBP7,671,800, which was calculated by reference to a proportion of the revenues of GTBank UK over the relevant period and included a 30 percent discount for early settlement.

Responding to the fine, the bank said in a statement, “Guaranty Trust Bank UK Limited (GTBank UK) has reached a settlement with the FCA, accepting findings in relation to historical Anti-Money Laundering (AML) controls in its operations in the period October 2014 to July 2019.”

“The Bank has cooperated fully with the FCA investigation and has agreed to a penalty sum of GBP7,671,800, which has been calculated by reference to a proportion of the revenues of GTBank UK over the relevant period and includes a 30 percent discount for early settlement.”

Explaining further, the bank said, “The FCA’s investigation focused on GTBank UK’s AML controls and steps taken by GTBank UK to remediate these to ensure they operated in line with the relevant requirements.

Final and no further action is anticipated in respect of this matter. The FCA acknowledged in its findings that GTBank UK has spent considerable time and resources in order to bring its AML standards up to the required level.”

Commenting on the issue, the managing director of GTBank UK, Mr. Gbenga Alade, said: “As a responsible financial services institution that is committed to best practices, GTBank UK takes its AML obligations extremely seriously. We note with sincere regret the FCA’s findings regarding AML control gaps in our operations in the past and we are very sorry for this.”

The FCA said between 2014 to 2019, GT Bank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.

It also accused the bank of failure to monitor customers’ transactions and business relationships to the required standard.

The Financial watchdog said it has a policy that compels financial institutions to have in place effective AML controls to mitigate the risk of individuals and organisations using financial institutions to circumvent restrictions designed to prevent them from benefitting from assets obtained by illegal means.

But GTBank has not disputed the findings and agreed to settle, the FCA claimed.

This implies that GTBank “has qualified for a 30 percent discount. Without this discount, the financial penalty would have been £10,959,700.”

He further stated: “We would like to assure all our stakeholders and the general public that necessary steps have been taken to address and resolve the identified gaps. Whilst there was no direct customer impairment arising from the period under review (and the FCA’s findings do not include any instances of suspected money laundering), we have since reinforced our AML control framework and implemented changes in our AML processes in line with best practice with a view to ensuring that the highest standards are maintained in our operations.”

GTBank UK said it agreed to the fine settlement as part of the process of addressing historical issues and against a background of more recent improvements to its AML framework.

The investigations focused on gaps in GTBank UK’s AML processes in a period dating back to 2014 and running to a point in 2019 when GTBank had carried out significant remediation in relation to these matters.

The bank emphasised that the FCA’s findings focused on its business operations in the United Kingdom only and does not apply to other subsidiaries outside of the UK.

GTBank also assured its customers that there was no direct impairment on them. “We however recognise that effective AML controls inspire customer trust and ensure better outcomes for communities where we operate.

“We have enhanced our AML control framework through a comprehensive remediation programme to address the specific issues identified in the FCA’s findings and obtained specialist advice and review from external advisors.

“As relevant to the FCA’s findings, these steps have included enhancements to our AML policies, to our procedures relating to onboarding, customer due diligence, ongoing monitoring, and other AML related processes and enhancements to staff training. We have also conducted a comprehensive programme of work to review and as necessary remediate our customer files, which have been subject to review by external consultants.

“We have also continued to invest in people and systems to ensure sustained adherence to our AML controls and to protect our customers and the communities where we operate. In the last seven years, we have made significant infrastructure investments in enhancing our AML control framework.

“For example, in the last three years alone, we have invested over £10 million in transaction monitoring and screening platforms to transform our control framework across the Group.  We have also made significant investments to staff training.  This has included providing our staff with further specialist training from external experts, developing our approach to internally led AML training and enhancing our controls relating to administering AML training.

Throughout the remediation process, we have taken advice from highly skilled advisors, including FCA-approved consultants, to guide the Bank through the changes required to enhance its AML control framework and related processes. This has included review and advice on the Bank’s governance arrangements and culture relevant to AML compliance,” the bank explained.