NatWest cops landmark £265m money laundering fine for dirty money failures
The first criminal conviction of a bank under UK anti-money laundering laws should focus minds on compliance basics, accounting experts have said, after “incredible” failings led NatWest to accept musty-smelling bin bags containing millions of pounds in cash from a criminal gang.
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If this were a small accounting/law practice it would presumably be shut down over this. Too big to fail is the more fundamental problem here.
Quite.
Given the quantity of 'concerns' raised by operational staff (but ignored), and the sheer volume of physical evidence, it is frankly inconceivable that there wasn't any internal collusion somewhere within the bank.
So why no prosecution of individuals?
Unlike the impact on a small accounting/law practice, any penalties don't hit the transgressors.
Right so I am a little tiny micro business with a handful of hairdresser , restaurants , window cleaners , small shops - most keep reasonable records and pay tax on time and yet I am to get their ID , check it against a register , look in who I am dealing with , watch they they don't buy a stamp for a personal letter , do a Firm wide risk assessment etc.etc. Pay a Fee on £300 for AML (interesting that this year HMRC have completely made a mess of the renewal which means I am bombarded with email threatening me - I reply and get no response from anyone ) whilst Nat West appear to ignore the rules and pay what really is a minuscule amount given they are part Government owed etc etc. What is this County coming too . I can't believe who must be managing these Firms and would think the whole AML rules need an overhaul. If you recall when MTD 4 Vat came in it was discovered many Accountants were not even registered. I despair.
I assume every one followed procedure, accepted the status quo, did their own job, but did not think let alone question!
"Well it was only my job to count the number of bin-bags brought in - which I did. I think it was George's job to weigh each bag. I'm not sure who was meant to check if we were allowed to do the counting/weighing, but someone must have done that surely?"
Quite.
If even the big boys fuchs up, what chance for us mere mortals?
I had a GDPR (more crap) reminder last week - told them to F off (politely of course) as no longer have a computer...
This was posted from my abacus.
Basically when you are too big to fail, you don't really need to worry about such things. See also: https://www.bbc.co.uk/news/business-59689581
I find it hard to believe that these are compliance failures in the main. More like collusion or turning a blind eye by officials concerned. Heads should roll and there must be prosecution of Money Laundering officers involved right up the chain.
I have heard stories of legitimate cheque deposits being stopped by the receiving bank on account of being for a large amount. Maybe overzealous but you can see how that happens. Then massive amounts of cash get accepted by NatWest, despite concerns from staff members?
Very strange.
Never attribute to conspiracy that which can be explained by incompetence (and/or sheer indifference in this case per my above comments).
I fail to see how this 'should focus minds on the basics', a comment attributed to ' an accountancy expert'. Are we all to check back to make sure we didn't let one of these through? What are we supposed to do exactly? Advise our clients to get stronger bin liners?
Another 'words fail me' response: So Natwest are as bad as the big accountancy firms when it comes to regulatory compliance and performance in relation to the standards that they are required to maintain. I hear the too big to fail claims, and you are wrong. You are wrong because there is not enough competition in the market and closing down any business does not solve the problem. What solves the problem is hanging individuals out to dry: Where are the bosses of Natwest being handed custodial sentences? Where are the partners of the big five having their practicing certificates withdrawn and the membership of the ICAEW rescinded? That is where the big and small differ and we are all small so we are all more likely to suffer the wrath of the regulators, however, we are smarter because we use our common sense and don't accept bags of used fivers!
But they are too big to shut down in the 1st place is my TBTF point (and that clearly is not wrong by definition). Your other point is a general point about regulators and the like finding it too difficult & expensive to properly enforce rules against big fry and small fry are easier targets (to show their paymasters that they are (purportedly) doing their job), so they're the ones more likely to get shut down and fined etc. in general all else being equal ignoring TBTF.
TBFT, Trailer Boat Fishing Tournament
TBFT ; To be fair though
What does TBFT stand for? · — Too Big for Teens
Don't worry - I don't really need to know!
To be fair, whether you love or loathe acronyms, you'd have got further if you'd used the same four letters (in the same order) as Justin ... TBTF (not TBFT).
And he did use the full version (too big to fail) more than once in earlier posts on this thread ... but if you don't really need to know, then there's no problem anyway.
Anyone who has read Bob Mayer's Disaster Guides will know that there are generally seven steps to any catastrophe, like a plane crash or a military disaster.
As someone who, in the seventies and eighties worked in several High Street bank branches and subsequently in its head office treasury, I think I can spot a few of these here, although I used to see risk and funding horror stories rather than money laundering which wasn't a thing back then.
The first and most obvious one is the deferential attitude to "big" customers. In the old days a branch manager would happily tell a hard-up student that he wouldn't cash his £30 cheque and ten minutes later authorise a £250m telegraphic transfer payment by "Big" plc (his biggest and best customer) without a moments thought as to whether they actually had the money in place to fund such a transaction.
So, we'd have to occasionally tell a local Captain Mainwaring - "Do you realise that despite your lending discretionary power being £50,000, you've inadvertently just granted your customer a £100m overdraft?"
Or on another occasion "let's hope that £250m turns up tomorrow as we've had to take an emergency loan from the Bank of England this afternoon to cover that payment you authorised, and they'll want it back in the morning.!"
"Big" customers can account for the vast majority of one branch's annual fees and charges income, so why risk rocking the boat or upsetting them with a simple phone call to see what they were up to? Of course, normally it would be fine - until the day when, say, the payment instruction comes in a day early, and suddenly it's not fine at all.
We then move through the stages of :
Inertia - "it's always been done this way", to
Safety in numbers - "if there was anything wrong someone else would have spotted it", and on to
Faulty Alarm - "can't we fix that bloody alarm that keeps going off?", to
Fingers in the ears - "I've a horrible feeling something's wrong here but I'm frightened to be the one to put my head above the parapet" to
Escape - "with any luck I'll be in a different job when the s..t hits the fan.
You get the idea.
A good point being made here about fingers in ears. Whistleblowers get the sack, not a bonus.