The U.K. Financial Conduct Authority (FCA) fined the Bank of Beirut £2.1 million ($3.2 million) and stopped it from acquiring new customers from high-risk jurisdictions for four months.
The Financial Conduct Authority of Britain said on Thursday 5th MARCH 2015 that it had fined the Bank of Beirut and temporarily banned it from signing up new clients in high-risk locations after the lender misled regulators about efforts to prevent money laundering and other financial crimes.
The regulator said the Bank of Beirut repeatedly gave misleading information about the progress of efforts to address concerns about the lender’s financial crime identification systems and controls.
The bank, which operates in Australia, Britain, Cyprus, Germany, Lebanon and Oman, was fined £2.1 million pounds, and was banned from acquiring new clients for 126 days in places considered to be at high risk for financial crime.
A former compliance officer at the bank and an internal auditor were also fined a combined £29,500, the regulator said.
Georgina Philippou, the F.C.A.’s acting director of enforcement and market oversight, said in a news release.
· “It is essential to consumer protection, market integrity and the prevention of financial crime that we can rely on firms giving us the right information at the right time,”
· “Bank of Beirut’s failings impeded us and left it open to the risk that it might be used for financial crime.”
The Bank of Beirut settled at an early stage of the investigation, otherwise it would have faced a fine as high as £3 million and a ban of up to six months on acquiring customers in high-risk areas.
· “Senior management failed to ensure that the actions required by the authority were implemented, even when deadlines were extended,” the regulator said as part of its findings.
· “Bank of Beirut then repeatedly provided inaccurate information to the authority that suggested it had completed actions, when it had not.
· In doing so, Bank of Beirut failed to demonstrate the culture and level of cooperation expected by the authority.”
The Bank of Beirut said on Thursday that it accepted the F.C.A.’s findings and had fully cooperated in the inquiry.
· “The matters investigated by the F.C.A. are historical issues that existed prior to 2013, all of which have been fully remediated by the bank,” the lender said in a news release.
· “The bank has significantly enhanced the resources in its compliance and risk teams.
· Compliance with its regulatory obligations is a key area of focus for the bank going forward.”
After supervisory visits in 2010 and in 2011, the F.C.A.’s predecessor agency raised concerns about the Bank of Beirut’s culture, finding that too little consideration was being given to the risk that the lender could be used for financial crimes.
The regulator then required the bank to carry out a number of actions to strengthen its identification of potential financial crimes and to prevent money laundering.
The bank, however, failed to carry out parts of the remediation plan and repeatedly misled the authorities by saying it had, the F.C.A. said on Thursday.
After a follow-up visit by the regulator in March 2013, the Bank of Beirut hired an external consultant and appointed a dedicated team to undertake and finalize the improvements, the F.C.A. said. The so-called remediation plan was completed in October 2013, the regulator said.
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