AML Fines: FCA fines Al-Rayan Bank for Laxity in Implementing Anti-Money Laundering Controls

The FCA has fined Al-Rayan Bank a sum of £4,023,600 for lapses in its money control systems.

This followed the FCA's investigation, which lasted from April 2015 to November 2017. Al-Rayan was found to have permitted money to pass through the bank and be used within the U.K. without adequately carrying out its due diligence by following the FCA rules.

The FCA stated that Al-Rayan's failure was exacerbated by a lack of staff training on handling large deposits, despite the fact that it was aware of the implications but failed to implement the necessary AML controls. This further increased the risk of money laundering and financial crime.

The executive director of enforcement and market oversight at FCA, Mark Steward, said: "Al Rayan failed to manage the risk that it might be used to facilitate money laundering."

"These failings create the conditions in which financial crime is facilitated and can take root within a firm." While the risk was caught in time, the failings here were egregious.

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"The FCA will continue to raise the stakes for firms that do not take their financial crime responsibilities seriously, especially in preventing money laundering risks, which harm confidence and integrity in our market, and in preventing financial crime, which is a key component in the FCA’s three-year strategy."

Al Rayan, without disputing the findings, agreed to settle, which qualified it for a 30% discount instead of a £5,748,000 penalty if a settlement was not reached.

The Chief Executive Officer at Al-Rayan Bank, Giles Cunningham Bank, also said:

"The FCA identified historic weaknesses in the Bank’s financial crime systems and controls that date back to a period between 2015 and 2017.

"The FCA found no evidence of any money laundering or other criminal activity by the bank nor its customers, and none of the bank’s existing management were in a senior management function at the time."

"The Bank cooperated fully throughout, and all identified weaknesses have been fully resolved with the support and assistance of external, independent subject matter experts."

"The financial penalty will have no material impact." The bank remains well capitalized and will report very strong financial results for 2022.

"Maintaining strong defences against the evolving threats of financial crime is an essential part of our business plan and is being led by the new Board and Executive team."

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