On October 12, 2016, the FCA published the final notices issued
to Sonali Bank (UK) Limited and its former Money Laundering
Reporting Officer, Mr. Steven Smith for AML failings. SBUK was
fined £3,250,600 and restricted from accepting deposits from
new customers for a period of 168 days. Mr. Smith was fined
£17,900 and banned from performing the senior management
functions of an MLRO or compliance oversight or the money
laundering reporting controlled function in any UK regulated
The FCA found that SBUK had breached Principle 3, which requires
that a firm take reasonable steps to ensure that it has organized
its affairs responsibly and effectively, with adequate risk
management systems. The bank had failed, amongst other things,
adequately to put AML monitoring procedures into place, to take
steps to ensure that the importance of AML compliance was
entrenched throughout the business, to implement oversight of the
MLRO department or to ensure that its MLRO department was
sufficiently resourced. SBUK also breached Principle 11, which
requires firms to deal with the FCA in an open and cooperative way
and to disclose to the FCA anything relating to the firm of which
the FCA would reasonably expect notice. The bank had failed to
notify the FCA in a timely manner of a suspected significant fraud
committed by one of its employees against one of its customers.
The FCA found that Mr. Smith had breached Statement of Principle
6 for Approved Persons, which requires an approved person to
exercise due skill, care and diligence in managing the business of
the firm for which he is responsible. It also found that Mr. Smith
had been knowingly involved in SBUK's breach of Principle 3.
Mr. Smith had, amongst other things, failed to ensure that
SBUK's senior management was aware of the issues with the
bank's AML systems and procedures or of the likely effects that
the lack of resourcing in that area would have and had failed to
put adequate systems and procedures in place to ensure the ongoing
assessment of AML risks posed by individual customers. The FCA
acknowledged that Mr. Smith had taken some steps to improve the
situation at the bank and that he was seriously overworked but
still considered his failings to be particularly serious.
The government has been working to incorporate the changes required as a result of the OECD's work on BEPS Action 5: Harmful Tax Practices, which requires implementation of a Nexus approach to the Patent Box regime.
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