NatWest Fined £265m For Failing to Prevent Money Laundering by Gold Traders

NatWest Group Plc, a state-backed British bank, has been fined £265 million ($351 million) by the Financial Conduct Authority (FCA) for failing to prevent money laundering by a gold trading business that deposited nearly £400 million in cash across its branches, including £700,000 in black bin bags at one branch.

The bank pleaded guilty to three offences under the UK’s Money Laundering Regulations 2007 in October, becoming the first financial institution to face criminal prosecution by the FCA under anti-money laundering laws. The fine was reduced from an initial £375 million because of the bank’s early guilty plea and cooperation with the authorities.

The case involved Fowler Oldfield, a Bradford-based jeweller that was shut down following a police raid in 2016. The company was suspected of being part of a criminal network that laundered money from drug trafficking, tax evasion and other illegal activities through buying and selling gold.

According to the FCA, NatWest failed to adequately monitor and report the suspicious activity of Fowler Oldfield, which was its customer since 2012. The company had predicted an annual turnover of £15 million when it opened an account with NatWest, but it deposited about £365 million over five years, including £264 million in cash.

The FCA said that NatWest’s systems and controls were “woefully inadequate” and that the bank ignored “numerous red flags” that indicated money laundering. For example, Fowler Oldfield made large cash deposits at about 50 NatWest branches, sometimes exceeding the branch’s cash limit and causing vaults to overflow with bank notes. The company also used multiple couriers to transport cash in black bin bags, backpacks and suitcases, and sometimes deposited cash that was stained, damp or smelly.

The FCA’s lawyer Clare Montgomery said that NatWest’s failure to prevent money laundering was “deliberate and sustained” and that the bank was motivated by profit. She said that Fowler Oldfield was NatWest’s “single most lucrative” client in the Bradford area by 2014 and that the bank earned about £4.5 million in fees from the company.

NatWest’s chief executive Alison Rose said that the bank “deeply regrets” its failure to monitor Fowler Oldfield properly and that it takes its responsibility to prevent and detect financial crime “extremely seriously”. She said that the bank has made “significant investments” in improving its systems and controls since 2016 and that it will continue to cooperate with the authorities.

The FCA’s director of enforcement Mark Steward said that NatWest’s fine sends a “clear message” to the financial sector that it must comply with anti-money laundering regulations and report any suspicious activity. He said that money laundering is a “serious threat” to the integrity of the UK’s financial system and that the FCA will not hesitate to take action against those who fail to prevent it.






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