The Financial Services Authority (FSA) today fined Northern Bank 1,250,000 for breaches of its Money Laundering Rules. The size of the fine demonstrates the importance the FSA attaches to its statutory objective of reducing the chance of regulated firms being used for purposes connected to financial crime.
Carol Sergeant, Managing Director of the FSA, said:
“The FSA has made clear that we expect all financial firms to establish and maintain strong and effective anti-money laundering procedures. Firms that fail to do this significantly increase the risk of criminals misusing the financial system to support their criminal activities as well as failing to meet their legal obligations to prevent money laundering. ”
“The steps Northern Bank took to satisfy itself that its customers, particularly business customers, really were who they claimed to be, were inadequate. Northern Bank had previously identified weaknesses in their customer identification procedures but allowed them to persist.”
“The size of the fine in this case reflects the prevalence of the breaches, Northern Banks share of the market it operates in and its failure to take prompt and effective remedial action after it had originally identified its own failings.”
The FSAs investigation revealed weaknesses in Northern Banks anti-money laundering controls across its retail branch network. The investigation found that Northern Bank failed to obtain sufficient know your customer information to prove customer identity in an unacceptable number of new business accounts opened across its retail branch network between December 2001 and September 2002.