Santander fined £108m for money laundering failures

Santander atms - ANDY RAIN/EPA-EFE/Shutterstock
Santander atms - ANDY RAIN/EPA-EFE/Shutterstock

Santander has been fined £108m by the City watchdog after it found serious and persistent gaps in the bank’s anti-money laundering safeguards.

Around £300m passed through Santander accounts over a five-year period, potentially by criminals taking advantage of its “inadequate” controls, the Financial Conduct Authority said.

The bank was fined £107.7m by the regulator, which said the bank had “a prolonged and severe risk of money laundering” between 2012 and 2017.

Santander apologised and did not contest the watchdog’s findings, meaning that its original penalty of £153m was cut by 30pc.

The bank had failed to monitor the provenance or amount of money passing through 560,000 business accounts, meaning £298m went through accounts that were eventually banned.

In one case, an account that saw regular seven-figure deposits despite being expected to receive just a few thousand pounds per month was kept open for two and a half years.

According to the regulator, the bank was aware of its inadequate money laundering controls and began a series of reforms in 2013, which resulted in “some improvements” but failed to resolve the issue.

Mark Steward, the FCA’s enforcement director, said: “Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime.”

One small Santander business account was expected to see monthly deposits of just £5,000, but within six months was transferring millions of pounds to different accounts.

It was recommended for closure by the bank’s anti-money laundering team in March 2014, but no action was taken until September 2015 owing to “poor processes and structures”.

At this point, Santander decided to keep the account open after a request from law enforcement, but “lost track” of the account until reminded by the watchdog in December 2016 that it was still active.

Mike Regnier, Santander’s chief executive, said the bank took its responsibilities regarding financial crime “extremely seriously”.

He continued: “While we took action to address our AML (anti-money laundering) issues once they were identified, we accept that our AML framework at the time should have been stronger.

"We have since made significant changes to address this by overhauling our financial crime technology, systems and processes.”

Mr Regnier added that Santander now has over 4,000 staff working to tackle financial crime.

It comes a year after the FCA fined NatWest £264.8m, which admitted three offences of failing to comply with money laundering regulations.