By Jason Theodorou

The Royal Bank of Scotland has been fined £5.6 million, for failing to make sure that customers and transactions are not involved in terrorist activities. The Financial Services Authority (FSA) said that the partly nationalised RBS, and its various divisions including NatWest and Coutts, need to do more to screen customers and payments according to UK financial laws introduced in 2001.

In 2008, RBS failed to ensure that customers were on sanctions lists, which the FSA said had resulted in an 'unacceptable risk' of the bank inadvertantly financing terrorists.

Margaret Cole, the FSA's director of enforcement and financial crime, said: 'The involvement of UK financial institutions in providing funds, economic resources or financial services to designated persons on the sanctions list undermines the integrity of the UK's financial services sector'.

'By failing to screen relevant customers and payments against the Treasury sanctions list, RBS group left itself open to the risk that it was facilitating terrorist financing'.

RBS failed to observe the rules between December 2007 and December 2008, at the main RBS bank and also NatWest, Ulster Bank and Coutts & Co. RBS risked a fine of at least £8 million if it did not co-operate with the FSA. The risks were brought to the attention of the regulator by new management.

RBS did not screen any payments made to customers from overseas, and did not screen sterling payments to US institutions. The FSA has said that the bank had handled more overseas payments than any other in the UK.


Event Registration Online for

Topics