GIB provided correspondent banking services to overseas banks. This allowed them to provide products and services they would not otherwise be able to, including making payments in different currencies and across borders.
The FCA requires banks to do extra checks on their correspondent banking customers to reduce the higher risk of money laundering and terrorist financing associated with the service.
According to FCA, between 1 January 2012 and 31 December 2016, GIB did not adequately perform the additional checks required when it established relationships with the overseas banks and failed to demonstrate it had assessed those banks’ AML controls. GIB also failed to undertake annual reviews of the information it held on the banks it had a relationship with, failed to give staff adequate training on how to scrutinise transactions properly and did not establish appropriate policies and procedures for staff.
No evidence of actual money laundering was detected, though the risk of money laundering as a result of these deficient systems was significant.
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