"The Financial Conduct Authority has fined EFG Private Bank Ltd £4.2 million for failing to take reasonable care to establish and maintain effective anti-money laundering (AML) controls for high risk customers," the FCA said in a statement.
"The failings were serious and lasted for more than three years."
Tracey McDermott, head of enforcement and financial crime at the FCA added in the statement:"Banks are the first line of defence to make sure that proceeds of crime do not find their way into the UK.
"In this case while EFG's policies looked good on paper, in practice it manifestly failed to ensure that it was addressing its AML risks.
"Its poor implementation of its agreed policies risked the bank handling the proceeds of crime.
"These failures merited a strong penalty from the FCA."
The FCA said because EFG settled at an early stage of the investigation, the bank qualified for a 30-percent discount on its fine — without which the penalty would have totalled £6 million.