The Financial Conduct Authority (FCA) has started criminal proceedings against NatWest over alleged offences around money laundering regulations (MLR), which relate to £365m of payments.
At the centre of the case is a series of payments, worth hundreds of millions of pounds, made to a UK business customer of NatWest during a five-year period between November 2011 and October 2016.
The FCA has alleged that increasingly large deposits amounting to £365m were paid into the customer’s account, £264m of which was in cash.
According to the regulator’s case, NatWest’s systems and controls failed to adequately monitor and scrutinise this activity.
This is the first prosecution under the MLR against a bank and no individuals are being charged as part of the proceedings.
NatWest Group said that it takes “extremely seriously” its responsibility to prevent money laundering by third parties, adding that it has made significant, multi-year investments in its financial crime systems and controls.
In terms of the technical rules, the FCA alleges that NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of MLR 2007. The bank’s representatives will appear at Westminster Magistrates’ Court on 14 April.
Commenting on the case, John Dobson, chief executive at anti-money laundering experts SmartSearch, said: "What is being alleged is a failing on a massive scale, with astonishing amounts of cash involved, and it highlights that no business or bank is too big to fall victim to fraud."
He added: “I think it also suggests that they should have listened to the advice coming out of the market. The FCA has confirmed this is the first criminal prosecution under the money laundering regulations and the first against a bank.
"If the criminal case is proved, they could face fines of tens of millions of pounds. So, it will be interesting to see how far the FCA is willing to go to make an example of NatWest and bring to bear the full force of its prosecuting authority."