A wealth management firm is being fined over half a million pounds for breaching anti-money laundering regulations.

Nedbank Private Wealth Limited (NPW), based in Hill Street, has been asked to pay a civil penalty of £535,185 by the Isle of Man Financial Services Authority (FSA).

In 2018, a statistical return submitted to the FSA from the firm, indicated high proportion of Foreign Politically Exposed Persons , which led to an inspection of NPW.

The inspection, undertaken in May 2022,identified a number of breaches of the ‘Anti-Money Laundering and Countering the Financing of Terrorism Code 2019’ across its foreign politically exposed persons client-base.

The inspection found the level of detail necessary for the documented customer risk assessments for foreign politically exposed persons was not fully met.

Additionally, there was not sufficient evidence of recorded customer due diligence and enhanced due diligence in some foreign politically exposed persons cases.

Another code breach identified was that in some cases source of funds, or source of wealth were not adequately documented by the firm, as well as ongoing monitoring processes for foreign politically exposed persons not being fully effective.

And the policies and procedures of the firm did not enable for money laundering and financing of terrorism risks to be managed or mitigated.

The FSA says that business relationships involving foreign politically exposed persons poses a higher risk to money laundering and financing of terrorism.

That is because these individuals are considered to be more exposed to bribery and corruption.

This involves processes such as sufficiently establishing a source of wealth, conducting effective enhanced customer due diligence and enhanced monitoring.

The FSA said: ‘The absence, or ineffectiveness, of these controls will also affect a relevant person’s ability to conduct effective and appropriate monitoring, including scrutiny of transactions, which in turn may result in unusual or suspicious activity not being identified in the appropriate circumstances.

‘Without the appropriate effective procedures and controls being in place, or not being operated adequately, a relevant person will be unable to manage and mitigate the identified risks of Money Laundering/ Financing of Terrorism and conduct the business utilising a risk based approach as required by the Code.’

Nedbank has cooperated fully with the authority and agreed settlement at an early stage.