UK regulator fines Nigerian bank $815,000 over money-laundering controls

Fri Aug 9, 2013 12:01pm EDT

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Aug 9 (Reuters) - Britain's financial services regulator said on Friday it had fined the UK subsidiary of Nigeria's Guaranty Trust Bank 525,000 pounds ($815,000) for failing to have adequate controls to prevent money laundering.

The Financial Conduct Authority (FCA) said that between May 2008 and July 2010, GT Bank UK had failed to assess potential money-laundering risks, screen customers against sanction lists, establish the purpose of the accounts being opened in their London branch or review the activity of "high risk" accounts.

"Banks are at the front line in ensuring the proceeds of crime do not enter the UK financial system," said Tracey McDermott, the FCA's director of enforcement.

"GT Bank's failures were serious and systemic and resulted in an unacceptable risk of handling the proceeds of crime."

GT Bank UK's managing director said in a statement: "We have fully co-operated with the FCA in its investigation and we have accepted the findings." The statement said the lapses occurred early in its set up in Britain and had since been addressed.

London has been a favourite money-laundering venue for corrupt Nigerian politicians and criminal gangs. The role of British-based banks was highlighted during the trial and conviction of James Ibori, former governor of Nigeria's oil-producing Delta state, last year.

Ibori and his mistress held accounts at several British banks through which they laundered millions of pounds, it was alleged in the court case.

He is serving a 13-year prison sentence for embezzling 50 million pounds of state funds.

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