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NatWest pleads guilty to money laundering charges

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LONDON, UNITED KINGDOM - 2021/01/15: A man wearing a facemask as a preventive measure against the Covid-19 coronavirus walks past a branch of NatWest Bank in London. (Photo by May James/SOPA Images/LightRocket via Getty Images)
The FCA alleged that the lender failed to monitor suspect activity by a client that deposited about £365m in its UK accounts over five years. Photo: May James/SOPA Images/LightRocket via Getty Images

NatWest (NWG.L) has pleaded guilty to failing to prevent the laundering of almost £400m ($544m).

The bank, formerly Royal Bank of Scotland, is the first in the UK to admit to such an offence and said it “deeply regrets” its failings.

The charges were brought to Westminster Magistrates' Court by the Financial Conduct Authority (FCA). 

The case, which relates to three offences of not adequately monitoring customer accounts between 2012 and 2016, has now been referred to the Southwark Crown Court for sentencing.

The FCA alleged that the lender failed to monitor suspect activity by a client that deposited about £365m in its UK accounts over five years, of which £264m was in cash.

The client at the heart of the case is collapsed Bradford-based gold dealership Fowler Oldfield, which was closed down following a police raid in 2016, according to Reuters. The gold dealer indicated an annual revenue of £15m per year.

The UK watchdog confirmed that no individuals – neither current nor former employees – were being charged as part of these proceedings.

Read more: FCA pledges crackdown on fraud following LCF minibond scandal

"We deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers," NatWest chief executive Alison Rose said in a statement.

“In the years since this case, we have invested significant resources and continue to enhance our efforts to effectively combat financial crime. We work tirelessly with colleagues, other banks, industry bodies, law enforcement, regulators, and governments to help find collaborative solutions to this shared challenge.

“These partnerships are crucial to counter the significant and evolving threat of financial crime to society.”

A lawyer for the FCA told the court: “The facts of the case are complex, the likely sentence is a very large fine.” According to reports this is believed to be around £340m.

NatWest, which is 55% owned by taxpayers after receiving a £45bn bailout at the height of the 2008 financial crisis, said it would take a provision in its third quarter results in November in anticipation of the fine.

The sentencing hearing will take place around 7 December.

Shares were 0.2% lower in London on Thursday.

Watch: How to prevent getting into debt

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