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Money Laundering Failings: Santander Fined £107.8M by FCA

Author: Dr. Angelika Hellweger  16 December 2022

Angelika Hellweger of Rahman Ravelli considers the reasons for the penalty.

The Financial Conduct Authority (FCA) announced that it has fined Santander UK PLC £107.8 million after finding what it called "serious and persistent gaps" in the bank’s anti-money laundering (AML) controls.

According to the FCA, these gaps in Santander’s business banking operations created a prolonged and severe risk of money laundering and financial crime. The regulator said it imposed the fine after finding that Santander’s inadequate oversight of its AML systems hampered the bank’s ability to properly observe the conduct of more than 560,000 business customers between December 2012 and October 2017.

The FCA said Santander could not properly verify information provided by clients about their proposed business activities. This also meant that the bank was not able to assess whether money that was said to be going through some accounts was actually being deposited in them. The FCA also highlighted other examples of Santander failing to tackle the risk of money laundering, including failing to deal with red flags linked to suspicious activity.

Mark Steward, the FCA’s executive director of enforcement and market oversight, said:

"Santander's poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,"

Santander did not contest the FCA’s findings and agreed to reach a settlement with the FCA. This approach earned the bank a 30% discount on the original fine of £154 million. Santander’s chief executive, Mike Regnier, apologised for the bank’s shortcomings and said it has since made significant changes to its AML processes.

The case is another example of the FCA stepping in when it becomes aware of serious and persistent gaps in AML controls. But it should be noted that the fine imposed relates to historic failures from the 2012-17 period - and does not relate to the current status of Santander UK’s AML system – which raises the question of why the FCA took five years to identify and address these concerns.

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Dr. Angelika Hellweger

Legal Director

angelika.hellweger@rahmanravelli.co.uk
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Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.

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