The action under the Money Laundering Regulations (MLR) 2007 has arisen because of handling of funds deposited into accounts operated by a UK incorporated customer of NatWest.
It is the first attempted prosecution of a UK bank under the law.
The FCA is alleging that increasingly large cash deposits were paid into the accounts in question, amounting to a total of £365m, of which £264m was in cash. The alleged failure to adhere to the law occurred from 11 November 2011 to 19 October 2016.
The Financial Times reported that the criminal nature of the case means a conviction carries with it questions over whether a bank’s regulatory licenses will be renewed, and whether it can bid in public tenders.
As with a civil case, the court can also impose a fine.
NatWest Bank’s annual report 2019 said it was under review “in respect of money service business customers.” These are firms which transmit money, operate bureau de change or cash cheques.
MLR 2007 requires regulated firms to determine, conduct and demonstrate risk-sensitive due diligence and ongoing monitoring of relationships with customers for the purposes of preventing money laundering.
In a statement to the London Stock Exchange, NatWest said: “NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls.”
The bank was notified of the FCA’s investigation in July 2017 and has been co-operating since that time.
NatWest is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021 but no individuals are being charged as part of these proceedings.