Royal Bank of Scotland International (RBSI) has been hit by a £1m fine.
The Isle of Man’s Financial Services Authority (FSA) says it issued the £1,440,481 fine after the bank breached the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015.
The fine amount has been subsequently reduced to £1,008,337
The FSA found that RBSI was unable to demonstrate that its up-to-date Customer Risk Assessment process was brought into use in a ‘timely manner’ following the introduction of the Code.
And according to the FSA, this resulted in ‘inadequate assessments’ on documents pertaining to 2,239 of the bank’s non-personal customers.
Those customers were ‘on-boarded’ at the bank between 2015 and 2018 and were not rated high risk.
The breaches were identified during an investigation conducted by the FSA between June and July 2021 in relation to elements of RBSI’s deposit taking business.
It did note that RBSI has engaged 'promptly and positively with the Authority throughout this matter in a timely and constructive manner'.
In a statement about the fine, the FSA published a number of ‘key learning points for the industry’ following its review of the case.
The FSA said 'Compliance with the Code and its subsequent iterations is a legal requirement; the authority is committed to taking appropriate and proportionate action to address contraventions of the Code.
'The money laundering/terrorist financing risks posed by certain business relationships demonstrates the increased importance of on-boarding processes (including appropriate documentation and evidencing of risk assessments, sign off, conducting effective ‘Enhanced Customer Due Diligence’ and enhanced ongoing monitoring).
'The absence, or ineffectiveness, of these controls will 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.'
A spokesperson for RBSI said: ‘Compliance with financial services regulations is of the utmost importance to RBSI.
‘While we are in the process of finalising our review of the affected customers, we have already updated and improved our controls and procedures to ensure this cannot happen again.’