Is Tony Montana Handling Cash Payments At NatWest?

The Financial Conduct Authority (FCA) has today announced that it has commenced criminal proceedings against National Westminster Bank Plc (NatWest) in respect of offences under the Money Laundering Regulations 2007 (MLR 2007). 

The FCA alleges that NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of MLR 2007 between 11 November 2011 and 19 October 2016. These regulations require the firm to determine, conduct and demonstrate risk sensitive due diligence and ongoing monitoring of its relationships with its customers for the purposes of preventing money laundering.

The case arises from the handling of funds deposited into accounts operated by a UK incorporated customer of NatWest. The FCA alleges that increasingly large cash deposits were made into the customer’s accounts. It is alleged that around £365 million was paid into the customer’s accounts, of which around £264 million was in cash. It is alleged that NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.

NatWest is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021. This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank. No individuals are being charged as part of these proceedings.

IE COMMENT;
Given that you or I get asked what we need a mere £2000 in cash for, from every nosey parker bank cashier in the UK, over the phone as well as in branch, it is shocking to learn that the FCA is finally taking action after NatWest took 264 million quid – in cash! Was there a Tony Montana style fleet of Merc Hi-Top vans bringing in sacks of cash round the back door?
It is equally outrageous that no individual is being charged for handling these enormous sums of cash, as the public – who own NatWest – would love to hear their excuses in court. A senior person must have taken the decision after the first million or so arrived to authorise ever-increasing amounts being accepted. That should never have happened.
Trust underwrites any nation’s currency, otherwise we have no financial system beyond barter. If it is this easy to launder hundreds of millions in London, imagine how easy it is to funnel billions through Cyprus, Pakistan, Nigeria, Colombia or many other countries. No wonder people are gambling on Bitcoin when cases like these are exposed.
LEGAL COMMENT

Tony Wyatt, Barrister at Ewing Law: 

The commencement of criminal proceedings against NatWest Bank by the Financial Conduct Authority reads like a shot across the bow to London’s financial institutions. It is well known in commerce that the law places strict requirements on the movement of funds, and in particular on the movement of cash; think of the raised eyebrows when even a small bundle of £20 notes passes the cashier’s desk for proof of that. It is perhaps no surprise, then, that £365 million – £264 million of which was in cash – has caught the attention of the FCA.
The sums are mind boggling, but they are unlikely to be unique. And so the City must now be wondering ’why this one?’. Why has the FCA chosen to prosecute NatWest in the criminal courts, rather than via the usual route of civil action? As a corporate entity the outcome is likely the same: an unlimited fine. Plus the civil route is easier, lacking the higher standard of proof required in a criminal case.
Were one or more individuals to find themselves charged then this would of course change, with the maximum sentence then being one of 14 years imprisonment. And such a development can of course not be ruled out: we know little of the facts at this stage, but the mere allegation raises significant questions in terms of corporate governance, where wilful blindness to the company’s actions or policies is not a defence. Throw in the fact that – uniquely – NatWest is part-owned by the state and the complications just multiply.

For now, however, all we know is that the Financial Conduct Authority has finally bared its teeth. And for the City of London, that will come as an unwelcome surprise.

Jonathan Fisher QC, Barrister at Bright Line Law: 

“In terms of enforcement, initiating a criminal prosecution against a leading bank is like pressing the nuclear button. It is one thing for a bank to be fined for anti-money laundering failures, it is another thing for a bank to be criminally charged. In terms of reputation it is potentially very damaging, and given that anti-money laundering procedures have been around for a long time, if NatWest has fallen short, it leaves the bank with a lot of explaining to do. This is a 62.4% State owned bank, and so we have the irony of the government prosecuting itself! Other financial institutions will be sitting less comfortably today if their anti-money laundering procedures are not totally compliant with the requirements of the regulations”.

“If convicted, the Bank faces an unlimited fine and other regulatory consequences may flow. A conviction for breach of money laundering regulations is something which may be taken into account when deciding whether to renew authorisations, and the awarding of public contracts. There may be other consequences too. A bank criminally convicted of failing to take adequate measures to prevent money laundering is not a great place to be”.

About alastair walker 5652 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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