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FSA fines Turkish Bank £300k for money laundering failings

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FSA fines Turkish Bank £300k for money laundering failings

The Financial Services Authority (FSA) has fined Turkish Bank £294,000 for breaching the regulations on money laundering.

The FSA said that the breaches, which related to Turkish Bank UK correspondent banking arrangements, were widespread and lasted over two and a half years. 

In July 2010, the FSA visited Turkish Bank as a part of a thematic review on how banks operating in the UK were managing money laundering risks.

The regulator found that the bank failed to establish and maintain appropriate and risk-sensitive anti-money laundering policies and procedures and it failed to carry out adequate due diligence on the respondent banks it dealt with.

Turkish Bank UK is a wholly owned subsidiary of Northern Cyprus-based Turkish Bank and has a mainly retail customer base.

It offers a range of financial services, including correspondent banking, which involves a bank providing banking services to an overseas bank to enable the bank to provide its own customers with cross-border products and services.

Turkish Bank UK has acted as a correspondent bank for nine respondent banks in Turkey and six respondent banks in Northern Cyprus between 15 December 2007 and 3 July 2010.

This is the first time the FSA has taken enforcement action against a firm in relation to money laundering weaknesses in its correspondent banking arrangements, it said.

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