QUICK FACTS
Overview
The Financial Conduct Authority (FCA) issued a Final Notice to Barclays Bank Plc, imposing a financial penalty of £39,314,700 (after a 30% settlement discount from £56,163,900) for breaching Principle 2 of the FCA's Principles for Businesses.
The breach occurred between 9 January 2015 and 23 April 2021 and involved failures in anti-money laundering (AML) controls, specifically inadequate customer due diligence (CDD) and ongoing monitoring of its business relationship with client, Stunt & Co Ltd, which received £46.8m in suspicious transfers from Fowler Oldfield Ltd, a firm later linked to money laundering.
Details of the CASE
Barclays failed to manage money laundering risks associated with its client Stunt & Co Ltd, a gold refining and trading company owned by James Stunt. The FCA found that Barclays did not gather sufficient information on Stunt & Co's business nature, source of wealth, or funds during onboarding in January 2015, assigning it a low-risk rating without applying enhanced due diligence (EDD) despite indicators like high-risk jurisdictions (West Africa and the Middle East) and adverse media.
Post-onboarding, Barclays neglected ongoing monitoring, failing to scrutinise £46.8m in transfers from Fowler Oldfield Ltd between July 2015 and August 2016, which were inconsistent with expected activity and involved round-sum payments.
Barclays also overlooked triggers for EDD, such as a 2016 law enforcement request indicating suspicions of money laundering via Fowler Oldfield, police raids on both firms, and multiple Production Orders under the Proceeds of Crime Act 2002. Internal reviews, like the 2016 "Project Dust," concluded account activity was consistent without adequately addressing discrepancies or sharing intelligence across teams.
Despite further court orders and adverse media from 2017 to 2020, Stunt & Co remained low-risk until briefly upgraded to medium-risk in 2019–2020. Barclays only conducted a thorough exposure review in 2021 ("Project Rufus") after the FCA charged National Westminster Bank Plc related to Fowler Oldfield, leading to self-reporting.
WORKED EXAMPLES
ONBOARDING INCONSISTENCIES (January 2015)
Barclays opened Stunt & Co's account with limited details on its business model. The application stated "Gold Refining & Trading" with £3 million expected turnover, but a later business plan forecasted £11.1 million and sourcing from high-risk West African countries for Middle Eastern clients. No EDD was applied, and the risk rating stayed low.
Unscrutinized Transfers (July 2015–August 2016)
Stunt & Co received 561 payments totalling £46.8 million from Fowler Oldfield, often in round sums like £100,000. This exceeded expected turnover and contradicted Stunt & Co's stated independent sourcing, yet no transaction alerts triggered, and Barclays did not reassess risks or apply enhanced monitoring.
Response to Law Enforcement (August 2016)
Barclays received intelligence that Fowler Oldfield laundered £206 million in cash, with Stunt & Co as a key recipient. Due to resource issues and poor information sharing, no internal investigation followed, and Stunt & Co's risk rating remained unchanged despite subsequent police raids and Production Orders.
fines and Penalties
£39,314,700 (after 30% settlement discount; original amount £56,163,900)
Key quotes
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"Barclays failed to conduct its business with due skill, care and diligence in respect of the identification, assessment, monitoring and management of the money laundering risks associated with the provision of banking services to Stunt & Co." (From the FCA Final Notice, paragraph 5.2)
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"The laundering of money through UK financial institutions undermines the integrity of the UK financial system. It is the responsibility of UK financial institutions to ensure that they minimise the risk of being used for criminal purposes." (From the FCA Final Notice, paragraph 2.1)
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"Financial crime was facilitated, occasioned or otherwise attributable to the breach." (From the FCA Final Notice, referencing DEPP 6.5A.2G(11)(c) in penalty calculation)
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