TSB fined $3.5m for money laundering law breaches, bank 'disappointed to find itself in this position'

Monday, 6 September 2021

Five years after TSB Bank was formally warned for risk assessment and compliance failures, it has been fined millions of dollars for breaching anti-money laundering laws.

TSB Bank has been ordered by the High Court to pay $3.5 million for four breaches of anti-money laundering laws.

The decision comes after the Reserve Bank filed a claim against the bank in May for breaching the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).

The High Court at Wellington has now released its decision, ordering the bank to pay.

TSB had previously admitted it did not have adequate and effective procedures, policies and controls for monitoring and managing compliance with its AML/CFT programme; failed to review and maintain its AML/CFT programme; and failed to conduct a risk assessment in respect of its real estate operations or have regard to certain countries it deals with when reviewing its 2017 risk assessment.

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The decision said there was no suggestion that there had been any financing of terrorism or money laundering in relation to financial transactions through TSB, nor was the bank intentionally failing to comply.

“Rather, aspects of its risk assessment and AML/CFT programme were inadequate and were not reviewed when they should have been,” the decision read.

This comes five years after the bank was formally warned for risk assessment and compliance failures.

In a statement, TSB chairman John Kelly said the bank “was disappointed to find itself in this position”.

“While it was not alleged any money laundering or financing of terrorism had occurred through the bank and customers have not been put at risk, TSB acknowledged that it needed to address some areas of AML/CFT compliance and a significant work programme has been in place to do this over the past two years.”

He said the breaches related to the banks risk assessment and compliance programme between 2013 and July 2019.

“TSB is in a significantly different position now than it was then.”