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NatWest faces criminal action over money laundering offences

[March 16, 2021] By Tom Wilson and Iain Withers

LONDON (Reuters) - Britain's financial regulator has launched criminal action against NatWest over allegations it failed to detect suspicious activity by a customer depositing nearly 400 million pounds ($553 million) over five years, mostly in cash.

The case is the first criminal action taken against a British bank under a 2007 money laundering law, carrying a maximum penalty of an unlimited fine.

The Financial Conduct Authority (FCA) said it was bringing the proceedings after NatWest's systems failed to adequately monitor and scrutinise activity over an account held by a UK customer between November 2011 and October 2016.

Around 365 million pounds was paid into the unnamed customer's accounts, of which around 264 million pounds was in cash, the watchdog alleged.

NatWest will appear in court on April 14, the FCA said.

A source familiar with the matter said the watchdog was keeping the possibility of charging individuals under review.

NatWest had previously disclosed in its 2020 annual report that it had been notified in July 2017 of an FCA investigation under the money laundering law in relation to "certain money service businesses and related parties".

The FCA defines a money services business as a company operating a bureau de change, transmitting money by any means or cashing cheques payable to customers.

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People maintain social distance while they queue outside a Natwest bank in Wimbledon in London, Britain, May 1, 2020. REUTERS/Hannah McKay

The case threatens NatWest with further costs for past misdeeds at a time when it has been trying to clean up its image under CEO Alison Rose, who took over in 2019.

The bank - which remains 62% state-owned after a bailout in the 2007-09 financial crisis - rebranded from the scandal-tainted Royal Bank of Scotland name last year.

The company's shares fell 3% in early trading and were last down around 2%, compared to a 1% gain for the FTSE 350 banks index.

The bank said on Tuesday it was cooperating with the investigation.

"NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls," it said.

($1 = 0.7231 pounds)

(Reporting by Tom Wilson and Iain Withers; editing by Jason Neely and David Evans)

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