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Abbey National Fined By FSA For Money Laundering Compliance Failures

by Robin Pilgrim,, London

12 December 2003

The UK's Financial Services Authority announced on Wednesday that it has imposed a record £2,320,000 fine on the Abbey National group for compliance failings with regard to anti-money laundering monitoring of its clients.

According to the financial services regulator, Abbey National plc was fined £2 million for breaches of the FSA's Money Laundering Rules, whilst Abbey National Asset Managers Limited (ANAM) was fined £320,000 for systems and control breaches.

Speaking following the announcement of the fines, the FSA's Director of Enforcement, Andrew Procter, said:

“The FSA has repeatedly made it clear to the regulated community that it expects all financial firms as part of their compliance regime to establish and maintain strong and effective anti-money laundering procedures."

"The failure by Abbey National to monitor compliance with FSA Money Laundering Rules demonstrated a marked lack of regard for its regulatory obligations. Abbey National failed to ensure that suspicious activity reports were promptly considered and reported to the National Criminal Intelligence Service and to identify customers adequately. Both these controls are fundamental to the UK Anti-Money Laundering regime's effectiveness. Their failings also reflected the fact that the overall control environment, particularly compliance monitoring, has been weak across the group over a prolonged period."

"The size of the fine demonstrates that failure by firms to put in place these fundamental systems and controls will be dealt with severely by the FSA and it reflects the importance the FSA attaches to its statutory objective of reducing the chance of regulated firms being used for purposes connected to financial crime."

However, he concluded by announcing that:

"I was, however, pleased to see the personal commitment of Abbey’s CEO to resolving these cases promptly.”

Speaking to Reuters this week, a spokesman for the bank confirmed that action has been taken to address the issues raised by the FSA.

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