The UK Financial Conduct Authority (FCA) has levied a staggering £42 million penalty against Barclays for systemic failures in anti-money laundering (AML) controls. This marks one of the largest AML-related fines in recent UK banking history.
Breaking Down the Dual Investigations
Case 1: WealthTek Oversight Failures (£36 million fine)
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Barclays Bank UK failed to conduct proper due diligence on wealth management firm WealthTek
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Critical lapse: Didn’t verify WealthTek’s authorization to handle client money (easily checkable via the FCA Financial Services Register)
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Allowed £54 million in suspicious transactions to flow unchecked through client accounts
Case 2: Stunt & Co. Bullion Risks (£6 million fine)
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Barclays Bank PLC neglected enhanced due diligence for high-risk bullion refinery
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Missed multiple red flags in precious metals trading activities
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Failed to establish source of wealth for politically exposed persons (PEPs)
Why This Matters for Financial Regulation
The FCA’s action signals a tougher stance on AML enforcement:
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“These weren’t minor errors—they were fundamental failures in basic checks,” stated Mark Steward, FCA Executive Director of Enforcement
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Comes amid increased scrutiny following the FATF’s 2023 UK AML evaluation report
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Follows £107 million in total AML fines issued by FCA since 2022
Barclays’ Response & Remedial Actions
The bank has:
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Issued a public apology acknowledging the shortcomings
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Invested £300 million in upgrading financial crime systems (per Barclays Annual Report)
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Appointed a new Global Head of Financial Crime Compliance
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Implemented AI transaction monitoring systems
Industry-Wide Implications
Financial experts warn this case sets important precedents:
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“All banks must revisit their PEP and high-risk business vetting,” advises Thomson Reuters Regulatory Intelligence
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Private banking and bullion sectors now under particular scrutiny
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Regulatory technology (RegTech) solutions seeing increased adoption
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This enforcement action underscores the FCA’s commitment to its 2023-24 Strategy focusing on reducing financial crime risks.
