RBS 2014 Annual Report Download - page 122

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120
RBS – Interim Results 2015
Notes
16. Litigation, investigations and reviews (continued)
The results of the review were presented by Coutts to the DOJ on 5 November 2014. Coutts continues to
cooperate with the DOJ pursuant to the terms of the Programme. Coutts expects to reach resolution with the
DOJ in 2015 under the terms of the Programme. RBS has made appropriate provision based on its estimate
of exposure arising from this programme/review.
German prosecutor investigation into Coutts & Co Ltd
A prosecuting authority in Germany is undertaking an investigation into Coutts & Co Ltd in Switzerland, and
current and former employees, for alleged aiding and abetting of tax evasion by certain Coutts & Co Ltd
clients. Coutts & Co Ltd is cooperating with the relevant authorities. RBS has made appropriate provision
based on its estimate of exposure arising from this investigation.
Review of suitability of advice provided by Coutts & Co
In 2013 the FCA conducted a thematic review of the advice processes across the UK wealth management
industry. As a result of this review, Coutts & Co undertook a past business review into the suitability of
investment advice provided to its clients. This review is ongoing. Coutts & Co is in the process of contacting
clients and redress is being offered in appropriate cases. RBS has made appropriate provision based on its
estimate of exposure arising from this review.
Enterprise Finance Guarantee Scheme
The Enterprise Finance Guarantee (EFG) scheme is a government lending initiative for small businesses
with viable business proposals that lack security for conventional lending. From 2009 until March 2015, RBS
provided over £955 million of lending under the EFG scheme. RBS has identified a number of instances
where it has not properly explained to customers how borrower and guarantor liabilities work under the EFG
scheme. There are also concerns around the eligibility of some customers to participate in the EFG
scheme and around potential over or under-payment of quarterly premiums paid by customers. In January
2015, RBS announced a review of all EFG loans where there is a possibility that the customer may have
been disadvantaged. The review is ongoing but has been completed for a small number of customers and
RBS is in the process of advising these customers of their review outcome, which in some cases involves
payment of redress. At this stage, as there remains considerable uncertainty around the outcome of this
review, it is not practicable reliably to estimate the aggregate potential impact on RBS which may be
material.
17. Related party transactions
UK Government
The UK Government and bodies controlled or jointly controlled by the UK Government and bodies over
which it has significant influence are related parties of the Group. The Group enters into transactions with
many of these bodies on an arm’s length basis.
Bank of England facilities
In the ordinary course of business, the Group may from time to time access market-wide facilities provided
by the Bank of England.
The Group’s other transactions with the UK Government include the payment of taxes, principally UK
corporation tax and value added tax; national insurance contributions; local authority rates; and regulatory
fees and levies (including the bank levy and FSCS levies).