Estate agencies large and small who have business accounts with NatWest will be shocked to discover that the bank is to face criminal proceedings over an alleged lapse in its Anti Money Laundering (AML) procedures,
The Financial Conduct Authority (FCA) has made the announcement, alleging that the bank failed to adhere to several parts of the Money Laundering Regulations (MLR) 2007.
This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank.
Like any estate agency, regulations require NatWest to complete due diligence on its relationships with customers to prevent money laundering.
The FCA says the case arises from from the handling of funds deposited into accounts operated by a UK business customer of NatWest.
The financial industry regulator alleges that increasingly large cash deposits were made into the customer’s accounts.
It is alleged that around £365 million was paid into the accounts, of which around £264 million was in cash and that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.
No individuals are being prosecuted and NatWest itself is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021.
Hundreds of estate agencies have been fined for AML breaches in recent years, with many of them being NatWest customers themselves.
The FCA’s announcement comes just seven months after NatWest was heavily criticised for closing or suspending some business accounts without notice after firms applied for government Covid Bounce Back business loans via the bank.
“The Financial Conduct Authority has notified NatWest Group plc that it has commenced criminal proceedings against National Westminster Bank Plc for offences under regulation 45(1) of the Money Laundering Regulations 2007 for alleged failures to comply with regulations 8(1), 8(3) and 14(1) of the MLR 2007 between 11 November 2011 and 19 October 2016, arising from the handling of the accounts of a UK incorporated customer,” a spokesperson says.
“Since being notified of this investigation in July 2017, NatWest Group has disclosed that the FCA was undertaking an investigation into NatWest Group’s compliance with the MLR 2007. NatWest Group has been co-operating with the FCA’s investigation to date.
“NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls.”