The Financial Conduct Authority has fined Guaranty Trust
Bank £525,000 ($814,196) for failing to have sufficient anti-money laundering controls for
high risk customers between May 2008 and June 2010, at the height of the
financial crisis.

The regulator said that the failings are “particularly
serious” because they affected customers based in countries associated with a
higher risk of money laundering, bribery or corruption, including accounts held
by politically exposed persons.

“Banks are at the front line in ensuring the proceeds of
crime do not enter the UK
financial system. GT Bank’s failures were serious and systemic and resulted in
an unacceptable risk of handling the proceeds of crime,”  said Tracey McDermott,
director of enforcement and financial crime at the FCA.

GT Bank, a subsidiary of Nigerian Guaranty Trust Bank,
opened an office in London
in May 2008 offering retail and wholesale banking products and services to
private, corporate and institutional clients. Its controls were reviewed in
2010 when the FCA’s predecessor, the Financial Services Authority, conducted a review
into banks’ management of money-laundering risks.

According to the review, GT Bank did not establish effective
anti-money laundering policies, by failing to assess potential money-laundering
risks posed by higher risk customers; screen prospective customers; obtain senior
management approval to establish business relationships with politically
exposed persons; establish the purpose of prospective customers’ accounts or
the sources of customers’ wealth; and by failing to review the activity of higher
risk customers’ accounts.  

As a result, the regulator said that GT Bank did not fully assess
their higher risk customers’ activities and thereby breached a number of rules
on systems and controls, as well as FCA Principle 3, “which requires firms to
take reasonable care to control their affairs responsibly and effectively”.

“Regardless of whether firms are well established or new to
the industry they must ensure that they have systems and controls to manage
money laundering risk,” McDermott added.

GT Bank settled at an early stage of the investigation and
qualified for a 30 per cent discount on its fine, which originally was set to
£750,000.