UK Financial Conduct Authority Takes Action Against Sonali Bank for Money Laundering Failings

The Financial Conduct Authority published the final notices issued to Sonali Bank (UK) Limited and its former Money Laundering Reporting Officer, Mr. Steven Smith for anti-money laundering failings. SBUK was fined £3,250,600 and restricted from accepting deposits from new customers for a period of 168 days. Mr. Smith was fined £17,900 and banned from performing the senior management functions of an MLRO or compliance oversight or the money laundering reporting controlled function in any UK regulated firm. 

The FCA found that SBUK had breached Principle 3, which requires that a firm take reasonable steps to ensure that it has organized its affairs responsibly and effectively, with adequate risk management systems. The bank had failed, amongst other things, adequately to put AML monitoring procedures into place, to take steps to ensure that the importance of AML compliance was entrenched throughout the business, to implement oversight of the MLRO department or to ensure that its MLRO department was sufficiently resourced. SBUK also breached Principle 11, which requires firms to deal with the FCA in an open and cooperative way and to disclose to the FCA anything relating to the firm of which the FCA would reasonably expect notice. The bank had failed to notify the FCA in a timely manner of a suspected significant fraud committed by one of its employees against one of its customers. 

The FCA found that Mr. Smith had breached Statement of Principle 6 for Approved Persons, which requires an approved person to exercise due skill, care and diligence in managing the business of the firm for which he is responsible. It also found that Mr. Smith had been knowingly involved in SBUK's breach of Principle 3. Mr. Smith had, amongst other things, failed to ensure that SBUK's senior management was aware of the issues with the bank's AML systems and procedures or of the likely effects that the lack of resourcing in that area would have and had failed to put adequate systems and procedures in place to ensure the ongoing assessment of AML risks posed by individual customers. The FCA acknowledged that Mr. Smith had taken some steps to improve the situation at the bank and that he was seriously overworked but still considered his failings to be particularly serious.
 
View the final notice issued to SBUK.

View the final notice issued to Mr. Smith.