Coutts’ loose checks over money laundering caused £8.75m fine

This article was last updated on April 16, 2022

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Coutts – the exclusive private bank owned by bailed-out Royal Bank of Scotland – has been fined £8.75m by the financial watchdog over its failure to ensure the anti-money laundering checks in its operations.

Coutts was founded by philanthropist, Thomas Coutts in the 18th century. It was then acquired by the RBS Group in 2000. The bank counts the Queen and various other pop and sports stars among its clients.

The Financial Services Authority has told that it had fined Coutts & Co, which is owned by Royal Bank of Scotland (RBS), did not have the proper checks in place when it started relationships with high-risk customers, suspected as involved in corruption.

FSA has stated: “The failings at Coutts were serious, systemic and were allowed to persist for almost three years. They resulted in an unacceptable risk of Coutts handling the proceeds of crime.”

FSA had visited Coutts in October 2010 as part of a review into banks’ management of high money-laundering risk situations. According to the city watchdog, the shortcomings in ensuring the checks took place between December 2007 and November 2010 as found during the review. On the other hand Coutts has told that it had cooperated “fully and openly” with the FSA throughout their investigation.

Boss of RBS Wealth Management, Rory Tapner has stated: “We are disappointed that Coutts & Co did not meet the FSA’s standards with regard to establishing and maintaining effective AML controls in relation to high risk clients. Since the FSA first raised its concerns, we have implemented a number of improvements to prevent any recurrence of these failings. Regulatory reforms continue apace. We remain committed to ensuring that our systems and controls are robust and counter the risk of financial crime in all the markets in which we operate.”

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