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15/01/2004
Bank of Scotland fined £1.25m for rules breaches
The Bank of Scotland plc (BoS) has been fined £1,250,000 for failing to keep proper records of customer identification, the Financial Services Authority has announced today.
BoS' was fined for weaknesses in its record-keeping systems and controls across its retail, corporate and business banking divisions, as required by the FSA's Money Laundering Rules.
In over half of the sample of accounts tested in late 2002, BoS had "failed to retain" either a copy of the customer identification evidence or a record of where this evidence could be obtained. These failings were made worse by BoS' "inability to determine" the areas in which the breakdown in its record keeping systems had occurred, the FSA said.
Andrew Procter, FSA Director of Enforcement, said: "The FSA requires firms to maintain records of customer identification because these records are vital to the investigation, detection and prevention of financial crime. The records can help law enforcement agencies by identifying individuals involved in money laundering and linking them with criminal funds passing through the UK financial system.
"The failure by Bank of Scotland to keep proper records of customer identification could have seriously undermined its ability to comply with the requirements of orders served by law enforcement agencies under the Proceeds of Crime Act."
The Bank of Scotland has since taken "prompt and effective" remedial action to resolve issues uncovered by the FSA probe. The FSA said that it was "satisfied" that the bank has dealt with the issue appropriately.
(gmcg)
BoS' was fined for weaknesses in its record-keeping systems and controls across its retail, corporate and business banking divisions, as required by the FSA's Money Laundering Rules.
In over half of the sample of accounts tested in late 2002, BoS had "failed to retain" either a copy of the customer identification evidence or a record of where this evidence could be obtained. These failings were made worse by BoS' "inability to determine" the areas in which the breakdown in its record keeping systems had occurred, the FSA said.
Andrew Procter, FSA Director of Enforcement, said: "The FSA requires firms to maintain records of customer identification because these records are vital to the investigation, detection and prevention of financial crime. The records can help law enforcement agencies by identifying individuals involved in money laundering and linking them with criminal funds passing through the UK financial system.
"The failure by Bank of Scotland to keep proper records of customer identification could have seriously undermined its ability to comply with the requirements of orders served by law enforcement agencies under the Proceeds of Crime Act."
The Bank of Scotland has since taken "prompt and effective" remedial action to resolve issues uncovered by the FSA probe. The FSA said that it was "satisfied" that the bank has dealt with the issue appropriately.
(gmcg)
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