Last month, the Financial Conduct Authority (FCA) handed out a £37,805,400 fine to the London branch of Commerzbank AG for significant failings related to anti-money laundering controls and measures. This costly fine included a 30% discount, as the firm offered to settle at an early stage of the investigation.
The full fine without an early settlement discount would have been £54,007,800.
Commerzbank AG’s anti-money laundering systems and controls were found to be inadequate between October 2012 and September 2017, with the investigation concluding that although Commerzbank London was aware of the issues and vulnerabilities, they failed to take any reasonable steps to resolve the weaknesses.
The FCA had already raised several concerns about the failings in AML measures in 2012, 2015 and 2017; prompting a full investigation.
Whilst the FCA already had guidance in place for preventing money laundering and terrorist financing, the failings of Commerzbank London came at the same time that the governing body was publishing new advice on the steps and measures that firms could and should take to reduce financial crime and the associated risks.
All FCA regulated firms operating in the UK (inclusive of branches of overseas firms) are required to develop and implement effective and adequate controls and systems for preventing money laundering and are expected to maintain an effective risk-based AML framework and compliance program.
Effective anti-money laundering (AML) controls include areas such as company wide risk assessments, adequate and robust due diligence procedures and effective transaction monitoring.
Customer due diligence and risk management policies are an essential part of AML controls and should be implemented in conjunction with standard AML policies and procedures.
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