Question

Habib Bank’s MLRO fined £17,500 for inadequate AML systems and controls.

Habib Bank AG is a Swiss bank with branches in UK. Regulator imposed the fine due to:

Inadequate risk assesment, regarding geography of the client and client’soperations.

Inadequate EDD process regarding beneficial ownership and source of wealth. Lack of proper documentary evidence. Improper timing of completing EDD process.

MLRO was not providing sufficient overwiew of the AML system within the firm to Senior Management.

Staff Training gaps.

Please answer carefully in points below questions:

1) What was case about?
2) What went wrong?
3) Risk associated with the case?
4) What could be done to prevent/ to avoid similar situation in the future?

Answer 1

Solution:

1.Anti-Money Laundering(AML) internal controls include those policies,procedure and processes designed to mitigate the risks of money laundering and support compliance with AML regulations.

Enhanced due diligence(EDD) is an additional KYC process to be followed for high risk customers.The customers who are classified under high risk category in customer due diligence are prone to money laundering and financing of terrorism.

In the given case,Habib Bank is fined due to non compliance with abovesaid regulations.