Coutts has been fined £8.75 million for failing to take reasonable care over its anti-money laundering controls.
The Financial Services Authority (FSA) found that failings at the bank were serious, systemic and had persisted for almost three years.
They came to light in October 2010 when the regulator visited Coutts as part of its review into banks’ management of money-laundering risks, only to discover that the bank had been failing to apply robust controls when starting relationships with high risk customers and did not consistently apply appropriate monitoring.
In addition, Coutts’ anti-money laundering team failed to provide an appropriate level of scrutiny and challenge.
Deficiencies were identified in nearly three quarters of the Politically Exposed Persons (PEP) and high risk customer files reviewed.
Specifically, Coutts had failed to:
Gather sufficient information to establish the source of wealth and source of funds of its prospective PEP and other high risk customers.
Identify and/or assess adverse intelligence about prospective and existing high risk customers properly and take appropriate steps in relation to such intelligence.
Keep the information held on its existing PEP and other high risk customers up-to-date.
Scrutinise transactions made through PEP and other high risk customer accounts appropriately.