20101011
reuters

LAGOS (Reuters) - Britain needs to enforce money laundering regulations more strictly after some of its leading high street banks accepted millions of pounds in deposits from corrupt Nigerian politicians, a graft watchdog said on Monday.

Global Witness said in a 40-page report that five banks had taken millions of pounds between 1999 and 2005 from two former Nigerian governors accused of corruption, but had failed sufficiently to investigate the customers or the source of their funds. ( www.globalwitness.org )

It said that in failing to do so, Britain's Barclays, NatWest, Royal Bank of Scotland (RBS) and HSBC, and Switzerland's UBS, might not have broken the law but had helped to fuel corruption in Nigeria.

HSBC said the allegations were "misguided". The four other banks and Britain's regulator, the Financial Services Authority (FSA), declined to comment. RBS took over NatWest in 2000.

"The FSA needs to do much more to prevent banks from facilitating corruption. As yet, no British bank has been publicly fined or even named by the regulators for taking corrupt funds, whether willingly or through negligence," Global Witness said in the report.

"This is in stark contrast to the United States, where banks have been fined hundreds of millions of dollars for handling dirty money."

Global Witness acknowledged that British regulation might have moved on since 2005, but said there were still gaps in the system, particularly regarding funds from "politically exposed persons" (PEPs) deemed to pose a higher money laundering risk.

"As a bank that has been at the very forefront of developing global PEP guidance over the last decade, we are deeply disappointed with these misguided allegations," a spokesman for HSBC said when asked about the report.