Lloyds Bank Corporate Markets Plc, Jersey Branch (LBCM, Jersey Branch) (2022-08-12)

Summary

This is a JFSC public statement announcing that on 4 August 2022 it imposed a civil financial penalty of £498,000 on Lloyds Bank Corporate Markets Plc, Jersey Branch (LBCM, Jersey Branch) for breaches of the AML/CFT Code and the Banking Code relating to a single correspondent banking relationship maintained between 2008 and 2020.

• Nature of breach: LBCM, Jersey Branch failed to properly identify a correspondent banking relationship (not identified as such until 2018), lacked specific correspondent banking policies and procedures until 2019, and applied inadequate CDD, ongoing monitoring and transaction monitoring.
• Notification failure: LBCM, Jersey Branch failed to notify the JFSC promptly and fully when it identified the correspondent banking activity and the absence of related policies in 2018.
• Remediation failure: New policies issued in 2019 were not effectively implemented or monitored, extending the period of inadequate controls until an internal review caught the issue in October 2020.
• Findings: The JFSC found breaches of Principles 3 and 6 of the Banking Code and the AML/CFT Code, characterised as negligent conduct, though mitigated by full cooperation, remediation, and the absence of customer losses.
• Penalty and discount: LBCM, Jersey Branch settled early and received a 50% Stage One discount, reducing the penalty from an estimated £996,000 to £498,000.

This is a retrospective enforcement notice concerning a single, now-remediated matter; it does not itself impose new ongoing requirements, but it reiterates the JFSC's expectations that registered persons identify correspondent banking relationships, apply risk-based CDD and monitoring, maintain tailored AML/CFT business risk assessments and training, and notify the JFSC promptly of relevant deficiencies.

Applies to

deposit-taking businesses, banks, registered persons providing correspondent banking services