The Financial Services Authority, the UK regulator, has fined the Royal Bank of Scotland, which includes National Westminster, Coutts and Co and Ulster Bank, £5.6 million ($8.9 million) for allowing UK Treasury sanctions to be violated.

The FSA document outlining the reparations stated that RBS was in breach of Money Laundering Regulations 2007 by not having adequate systems and controls in place to prevent funds or financial services being made available to persons on the HM Treasury sanctions list.

The Treasury is the only body that has the licence to make allowances for persons sanctioned under United Nations terrorism, Taliban and Al-Qaeda orders.

Between December 2007 and December 2008, all members of RBS failed to adequately screen customers and payments against the sanctions list which consequentially may have resulted in facilitating transactions for or with sanctions targets, including terrorist organisations, outlined the document.

This in turn would pose a grave risk to the integrity of the UK financial services sector, particularly in light of the UK regulatory body’s pursuit of its financial crime objective.

RBS qualified for a 30 per cent reduction from the original penalty of £8 million as it agreed to settle at an early stage of the FSA investigation.

The fine is the first imposed by the FSA under the Money Laundering Regulations.