Jersey Unreported Judgments

Inferior Number Sentencing - Breach of Money Laundering Order

[2020]JRC022

Royal Court

(Samedi)

5 February 2020

The Attorney General

-v-

Abu Dhabi Commercial Bank PJSC Jersey Branch

Sentencing by the Inferior Number of the Royal Court, following a guilty plea to the following charge:

Plea: Guilty. 

Details of Offence:

In the case of two Middle Eastern customers, Mr A and Mr B, between 2013 and 2019 Abu Dhabi Commercial Bank Jersey failed to apply adequate monitoring of account activity and failed to assess the risk of money laundering adequately.

In both cases large amounts of cash, in the tens of thousands of US dollars each time, were withdrawn over a period of years from the customer's Jersey bank accounts, without sufficient scrutiny of what the money was being used for.  The total amount of cash withdrawn was over USD 1.2m (a little under £1m).

In the case of Mr A, Abu Dhabi Commercial Bank Jersey:

(i)      failed to detect and react to changes in the account activity;

(ii)     failed to identify, investigate, or prevent a number of large cash withdrawals from the account over a period of years; and

(iii)     allowed a situation to continue where thousands of dollars in cash were still withdrawn from the account even while earlier withdrawals of large sums of cash were being investigated.

In the case of Mr B, Abu Dhabi Commercial Bank Jersey:

(i)      failed to gain a full understanding of Mr B's source of funds and source of wealth, despite his status as an increased risk customer;

(ii)     failed to keep up to date information on Mr B's country of residence, employment and state of health;

(iii)     failed to detect and react to changes in Mr B's account activity;

(iv)     failed to identify, investigate, or prevent a number of large cash withdrawals by Mr B; and

(v)      allowed a situation to continue where Mr B was still permitted to withdraw thousands of dollars in cash while he was being investigated for exactly the same account activity and there was reason to believe he lacked capacity to operate his account.

Details of Mitigation:

Guilty plea at an early stage; prior conviction was not factually or legally relevant; fully cooperative with investigation and JFSC; breach was not systemic; the defendant is not continuing business in Jersey.

Previous Convictions:

Intermeddling.

Conclusions:

This was the first case of a bank being sentenced in the Royal Court for breaches of the Money Laundering Order 2008.  The Crown invited the Court to have regard to the limited Jersey authorities and the recent approach of the Financial Conduct Authority in the UK to fining banks for Anti-Money Laundering breaches

Costs order sought in the sum of £25,000. 

Sentence and Observations of Court:

Costs order made in the sum of £25,000. 

W. A. F. Redgrave Esq., Crown Advocate.

Advocate W. Grace for the Defendant.

JUDGMENT

THE BAILIFF:

1.        Reasons for the sentence will be delivered on a subsequent occasion.  This is an important matter, it represents one of the few cases in this area and we wish to give fuller reasons than normally would be the case. 

2.        In our judgment the correct level of fine is one of £475,000 and that is the fine that we impose.

3.        We also make an order for the payment of costs in the sum of £25,000 allowing 21 days for the necessary arrangements to be made for the payment of both of those sums.

Authorities

AG v Caversham and Bell [2005] JRC165

Bell and Ors v AG [2006] JCA 014

AG v Abu Dhabi Commercial Bank PJSC, Jersey Branch [2018] JRC 192

Financial Conduct Authority's Enforcement Information Guide (April 2017)

The Decision Procedure and Penalties Manual (January 2020)

FCA Final Notice: Habib Bank AG Zurich (4 May 2012),

FCA Final Notice: Guaranty Trust Bank (UK) Limited (8 August 2013)

FCA Final Notice: Deutsche Bank AG (30 January 2017)

FCA Final Notice: Canara Bank (6 June 2018)

FCA Final Notice: Standard Chartered (5 February 2019)