NatWest Pleads Guilty in £400m Money Laundering Case

A leading UK high street bank has pleaded guilty to failing to stop a massive money-laundering operation carried out by a business customer.

Criminal charges were brought against NatWest by regulator the Financial Conduct Authority (FCA) under the UK’s Money Laundering Regulations 2007.

The lender, which is state-backed, entered a guilty plea at Westminster Magistrates Court in the first case of its kind. It covers four years between November 2012 and June 2016, during which the bank was accused of failing to monitor deposits amounting to hundreds of millions of pounds.

According to the BBC, the customer in question, Bradford-based jeweller Fowler Oldfield, was predicted to have a turnover of around £15m when NatWest onboarded it. However, it subsequently deposited £365m over the period, £264m of which was in cash, even though it was agreed the bank would not handle cash deposits.

NatWest is now likely to face a hefty fine.

John Dobson, CEO of regtech firm SmartSearch, said he hoped the case would be a wake-up call for the industry and predicted a fine above £400m.

“Change is long overdue. Despite tools being readily available to prevent this illegal activity, currently 99% of ill-gotten gains are successfully laundered by criminals, and regulated businesses need to do much more to prevent this,” he added.

“If the moral obligation to stop terrorists, drug smugglers and sex traffickers legitimizing their money isn’t enough motivation, through this case the FCA has shown it is willing to severely punish those who don’t take their responsibilities seriously.”

The scale of global money laundering is famously hard to estimate, but the UN believes it could be between 2-5% of global GDP annually, which amounts to as much as $4tn or more today.

However, global fines for anti-money laundering (AML) and data privacy compliance breaches fell by nearly 50% year-on-year in the first half of 2021.