Barclays Bank Plc

On 25 November 2015, the Authority imposed a financial penalty of £72,069,400 on Barclays Bank plc (“Barclays”) for breaches of Principle 2 (due skill, care and diligence) between 23 May 2011 and 24 November 2014 (“the Relevant Period”).   Barclays agreed to settle at an early stage of the Authority’s investigation. Barclays therefore qualified for a 30% (Stage 1) discount under the Authority’s executive settlement procedures. Were it not for this discount, the Authority would have imposed a financial penalty of £80,542,000 on Barclays.  Barclays failed to minimise the risk of financial crime in connection with a multi-billion pound Transaction executed for ultra-high net worth politically exposed persons (the Clients). As a result of the confidentiality requirements, Barclays determined that’s its usual processes for dealing with PEPs and assessing financial crime risks were not appropriate for the Business Relationship. Instead, Barclays sought to address the financial crime risks associated with the Transaction in an ad hoc way. In doing so, Barclays did not exercise due skill, care and diligence. It failed to identify, assess and monitor any risks appropriately. Specifically, in breach of Principle 2: a)    Barclays’ front office and senior management failed adequately to oversee Barclays’ handling of the financial crime risks that were associated with the Business Relationship.  b)    Having classified the Clients as Sensitive PEPs, Barclays failed to appropriately identify and address through its due diligence processes a number of features of the Business Relationship that the Authority considers could have indicated a higher risk of financial crime. c)    Barclays did not follow its standard procedures that it would normally follow for establishing relationships with Sensitive PEPs or put acceptable alternative procedures in their place.   d)    Barclays failed to establish adequately the purpose and nature of the Transaction and did not sufficiently corroborate the Clients’ stated source of wealth and source of funds for the Transaction.   e)    Barclays failed to monitor appropriately the financial crime risks associated with the Business Relationship on an ongoing basis. f)    Barclays failed to maintain adequate records of the due diligence it undertook in connection with the Business Relationship and to ensure that those records were readily identifiable and capable of retrieval. As a consequence, Barclays’ threatened confidence in the UK financial system and failed to mitigate the risk to society of financial crime. A copy of the Final Notice is displayed on the Authority’s web site and can be accessed using the following link: