Failing Money Laundering Obligations: Ghana Int'l Bank Must Pay £5M+

Niall Hearty of financial crime specialists Rahman Ravelli considers the case.

Ghana International Bank (GIB) now has to pay more than £5 million for money laundering failings.

The Financial Conduct Authority (FCA) has imposed a £5,829,900 financial penalty on the bank for poor anti-money laundering and counter-terrorist financing controls relating to its correspondent banking activities.

GIB provided correspondent banking services to overseas banks. This allowed those banks to provide products and services they would not otherwise be able to, including making payments in different currencies and across borders.

Banks are required by the FCA to conduct extra checks on their correspondent banking customers in order to reduce the higher risk of money laundering and terrorist financing that is associated with the service.

In announcing the fine, the FCA said that between 1 January 2012 and 31 December 2016 GIB did not adequately perform the additional checks required when it established relationships with overseas banks. GIB had failed to demonstrate it had assessed those banks’ anti-money laundering controls. GIB also failed to undertake annual reviews of the information it held on the banks it had a relationship with, failed to give staff adequate training on how to scrutinise transactions properly and did not establish appropriate staff policies and procedures.

In December 2016, the FCA visited GIB to review its financial crime controls. As a result of concerns the FCA identified, GIB voluntarily agreed not to take on new customers. This restriction remains in place.

While no evidence of money laundering was found, the FCA said “the risk of money laundering as a result of these deficient systems was significant.’’

GIB did not dispute the FCA’s findings and agreed to pay a financial settlement at the earliest possible opportunity, meaning it obtained a 30% discount on the financial penalty of £8,328,500.

The penalty imposed on GIB reflects how serious the FCA believes the failings were. GIB’s failure to perform the required checks meant that the bank was unable to properly scrutinise transactions worth £9.5 billion processed over the aforementioned period.

The fine is yet another reminder of the obligations placed on regulated firms when it comes to preventing financial crime.