Money Laundering . A alarming situation

  • Habib Bank Fined $844,000 Over Money-Laundering Control Failures

    By Ben Moshinsky - May 15, 2012 7:00 AM ET


    Habib Bank AG Zurich was fined 525,000 pounds ($844,000) by the U.K. financial watchdog for failing to put in place effective money-laundering controls.

    The Financial Services Authority also fined a former bank official 17,500 pounds for failing “to take reasonable care to establish and maintain” systems to prevent money laundering, the agency said in an e-mailed statement. The problems at the bank lasted from 2007 to 2010, the FSA said.

    “Firms must take a dynamic approach to assessing money laundering risk so they can adapt to the ever-evolving risks of financial crime,” Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said in the statement today.

    The FSA is leading a crackdown on companies that have insufficient systems and controls to manage risk. Coutts & Co., a private bank owned by Royal Bank of Scotland Group Plc, was fined 8.75 million pounds in March for not having effective money-laundering controls.

    About half of Habib Bank’s deposits came from jurisdictions “which had less stringent anti-money-laundering requirements or were perceived to have higher levels of corruption than the U.K.,” the FSA said.

    Both Habib Bank and the former official agreed to settle with the FSA at an early stage and qualified for a 30 percent discount. Anjum Iqbal, chief executive officer of the bank in the U.K., couldn’t be immediately reached for comment.

    To contact the reporter for this story: Ben Moshinsky in London at