Re-reading the FCA Decision Notice on Standard Bank over the weekend (oh yes, it’s a giddy life for me; wall-to-wall hedonism), one thing really caught my eye. It’s in the bit on the new method of calculating the financial penalty (as outlined in my last post) – specifically the aggravations and mitigations. And most specifically this: “The Authority considers that the following factor aggravates the failings: (1) The Authority has previously brought action against a number of firms for AML deficiencies and has stressed to the industry the importance of compliance with AML requirements.”
This sort of comment has been made before. For instance, in the FCA’s Decision Notice on Guaranty Trust Bank (UK) Limited in August 2013, the FCA made this observation: “GTBUK’s failings merit the imposition of a financial penalty. The FCA considers the failings to be serious because… [they] occurred in a period during which the Authority brought and published other Enforcement cases against a number of institutions for shortcomings in their financial crime systems and controls. As such, the Firm ought to have been aware of the importance of systems and controls to prevent and detect all types of financial crime, including money-laundering.” But – luckily for Guaranty Trust – this was before the new calculation regime, and so it was more of an observation than anything else.
Not so for Standard Bank. The fact that the FCA was able to say “we’ve done this before, with other institutions, and published our findings – you have been warned” cost the bank an additional 5% on their penalty – or £376,901. In other words, Standard Bank has been given a heavier punishment not because of what they did, but because others had already done it and been caught. It’s hard to think of a better way to make the case for learning from the mistakes of others. MLROs, download those Decision Notices pronto, and get training. Compared with £376,901, that training budget suddenly looks a real bargain!