FCA fines Ghana International Bank $7.1M for AML failings

The penalty, announced Thursday, comes nearly six years since GIB voluntarily agreed to stop onboarding new customers following an inspection by the FCA that flagged the weaknesses in its AML/countering the financing of terrorism (CFT) controls. That restriction remains in place. For its cooperation and improvements made in that time, GIB received a 30 percent reduction on the FCA’s originally proposed fine of £8.3 million (U.S. $10.2 million).

“GIB continues to work with the FCA and an independent expert to improve its financial crime controls,” the regulator stated.

The details: GIB, based in London, is owned by a consortium of Ghanian financial institutions, with the Central Bank of Ghana serving as its majority shareholder. The bank provides correspondent banking services to other financial institutions, most of which are based in Ghana or West Africa.

From January 2012 through December 2016, GIB did not recognize its correspondent banking services as a separate business, according to the FCA, including revenue generated from these activities within its other business lines. As a result, AML/CFT guidance in the area was “vague and lacked sufficient detail,” the FCA said, leading to failures in enhanced due diligence and ongoing monitoring.

In particular, GIB “did not adequately perform the additional checks required when it established relationships with the overseas banks and failed to demonstrate it had assessed those banks’ anti-money laundering controls,” the FCA said. “GIB also failed to undertake annual reviews of the information it held on the banks it had a relationship with, failed to give staff adequate training on how to scrutinize transactions properly, and did not establish appropriate policies and procedures for staff.”

Between December 2014 and December 2016, GIB engaged with independent experts that noted steps the bank needed to take to improve its AML controls, the FCA explained in its decision notice. But GIB failed to implement the advice it received until the FCA’s inspection in December 2016 led to its ongoing onboarding restriction.

The FCA said it considers GIB’s failings to be significant given the bank processed £9.5 billion (U.S. $11.6 billion) in respondent banking customer transactions during the relevant period. The regulator added no evidence of actual money laundering was detected in its inspection.

“Firms are gatekeepers of the financial system and have vital obligations to ensure they are not used to facilitate or perpetrate financial crime,” said Mark Steward, executive director of enforcement and market oversight at the FCA, in a press release.

GIB response: In a press release, GIB accepted “full responsibility” for the acknowledged deficiencies during the relevant period.

“Since the period under investigation, the bank has appointed a completely new board, with three new independent nonexecutive directors, and is also under new management with a new CEO, COO, CRO, and MLRO,” the bank stated. “[GIB] has also significantly strengthened its AML systems and controls; introduced an enhanced risk management framework; and increased the number of staff, particularly in key control and regulatory functions.”