A Jersey bank is prosecuted following making a SAR [2020 CASE]

Abu Dhabi Commercial Bank PJSC ("the Bank") were fined £475,000 after a SAR revealed their failure to maintain adequate policies and procedures to prevent money laundering.

As recorded in the judgement [see link below]

• Defence counsel say that matters came to attention as a result of the filing of a suspicious activity report and therefore the Bank effectively “self-reported”. 
• We accept that the filing of a SAR was the genesis of the investigation which has led to the current indictment. 
• We do not think that that necessarily equates with reporting a criminal offence and of course the filing of a suspicious activity report is as much for the protection of the financial institution as otherwise.

On 5th February, 2020, we imposed a fine in the sum of £475,000 (together with an order for costs in the sum of £25,000) on Abu Dhabi Commercial Bank PJSC (“the Bank”) for a single count of a breach of Article 37(4) of the Proceeds of Crime (Jersey) Law 1999 by failing to maintain appropriate and consistent policies and procedures relating to customer due diligence measures and risk assessment and management in order to prevent and detect money laundering as required by Article 11(1)(a) and (f) and Article 11(3)(a) of the Money Laundering (Jersey) Order 2008 (AG v Abu Dhabi Commercial Bank PJSC Jersey Branch [2020] JRC 022.)

Between 2013 and 2019 over US$1.2 million was withdrawn from two bank accounts held by two individuals, with no scrutiny as to where the money was going.  The cash was handed over the counter of branches in the UAE, tens of thousands of dollars at a time.  At no stage did the Bank seek evidence as to the legitimacy of the withdrawals. 

The Bank is one of the largest in the Middle East with an income of approximately £2 billion. It does not offer retail banking in Jersey and at the time had fewer than ten employees based here.

To place matters in context, cash is used much more frequently in the UAE than would be the case in Jersey. At the time there was no limit to the amount of cash that a Jersey customer could withdraw, although there were automated and manual monitoring methods. These failed to engage.

When an employee queried a particularly large withdrawal there was an 'unsatisfactory explanation', but this did not lead to any further action and further transactions were allowed.

The Court repeated that there had to be appropriate policies in the light of the degree of risk of money laundering inherent in the business, and these had to be applied consistently. It said:

• "The only aggravating factor was the fact that the bank's failings took place notwithstanding the extensive guidance on anti-money laundering and counter-terrorism financing legislation provided by the Jersey Financial Services Commissioner. It should have been apparent to any regulated entity in Jersey the importance attached to appropriate policies and procedures to counter money laundering."

AG v Abu Dhabi Commercial Bank PJSC Jersey Branch 14 Apr 2020 on Jersey Law website https://www.jerseylaw.je/judgments/unreported/Pages/[2020]JRC059.aspx

SOURCE

• https://www.gov.je/Industry/Finance/FinancialCrime/pages/judgments.aspx
• https://www.jerseylaw.je/judgments/unreported/Pages/[2020]JRC059.aspx