You may remember the money-laundering scandal last year, involving the Queen’s bank, Coutts.
According to the Financial Services Authority who investigated the bank:
” Coutts’ anti-money laundering team failed to provide an appropriate level of scrutiny and challenge, including not doing enough research on where prospective clients’ money had come from and not appropriately scrutinising transactions”
Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said:
“Coutts’ failings were significant, widespread and unacceptable.
“Its conduct fell well below the standards we expect and the size of the financial penalty demonstrates how seriously we view its failures.”
The Independent reported on the case:
” A private bank that counts the Queen among its clients was fined £8.75 million by the City watchdog today for failing to do enough to ensure it was not handling laundered money.
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, considered vulnerable to corruption, the Financial Services Authority (FSA) said.
Hitting the bank with its second fine in four months, the FSA said the failings were “serious and systemic” and went on for nearly three years, leading to an “unacceptable risk” of the bank handling the proceeds of a crime.
The regulator found deficiencies in nearly three-quarters of the high risk or “politically exposed persons” whose files it examined – although there was no evidence that Coutts had actually handled stolen money.
The fine is the largest ever issued by the FSA in connection with anti-money laundering issues.
The FSA’s investigation found that between December 2007 and November 2010, Coutts did not apply robust enough controls when starting new accounts and also failed to adequately monitor them once they were opened.
Overall, the FSA said Coutts’ anti-money laundering team failed to provide an appropriate level of scrutiny and challenge, including not doing enough research on where prospective clients’ money had come from and not appropriately scrutinising transactions”
Worrying stuff but what exactly is money-laundering?
Here’s a helpful guide :
” Money laundering is the covert introduction of illegally acquired assets into the legitimate economy with the aim of disguising their true illegal origin.
This may take place in three phases:
Phase 1: placement. In this phase the assets (primarily cash) are paid into banks and thus turned into bank money, or used to purchase assets that can be liquidated at short notice.
Phase 2: layering. The goal of this phase is to spread the money placed in phase 1. It often involves complex international transactions using, among other things, offshore banks and bogus companies. Another way to spread the money is through a myriad of confusing and seemingly unconnected transfers.
Phase 3: Integration. The integration phase is when the assets are reintroduced into the legal economy, which may involve purchasing assets (e.g. real estate or precious metals) or shareholdings, etc.”
You’re meant to be.
Of course with all this financial skullduggery afoot we can only hope that her Maj’s money is safe and sound.
If she’s got any concerns she could always withdraw the lot and hide it under a Royal mattress.