AML Regulations: Big Banks, Big Fines

April 8, 2019

New anti-money laundering (AML) regulations along with increased reporting requirements has been a recent trend in the fight against financial crimes.   Another big trend has been an increase in scrutiny on the clients and operations of European banks, as well as the massive fines by financial watchdogs for failures to meet AML compliance obligations. Here is a list of some of the big fines for AML failures by European banks:

Deutsche Bank - $41 million

The German bank’s ‘unsound and unsafe practices’ led to $41 million fine by U.S. Federal Reserve. The bank did not fully comply with the Bank Secrecy Act (BSA) and there was insufficient monitoring for billions of dollars in “potentially suspicious transactions” that were processed between 2011 and 2015.   Deutsche Bank also agreed to pay the U.K. and the New York State Department of Financial Services over trades that allegedly helped wealthy Russians move some $10 billion out of the country. Early in 2017, the bank had agreed to pay a staggering $7.2 billion settlement for the mortgage bond securities that contributed to the 2008 financial crises.

BNP Paribas - $246 million

The Federal Reserve Board fined the French bank for deficiencies in its oversight of, and internal controls over, foreign exchange (FX) traders who buy and sell U.S. dollars and foreign currencies for the firm's own accounts and for customers.  The traders used electronic chatrooms to communicate with competitors about their trading positions and manipulate prices.   Two months earlier, BNP Paribas agreed to pay a $350 million fine to New York’s banking watchdog for allowing its traders to manipulate foreign exchange rates and other illegal activity.

Danske Bank - $2 million

The bank is under investigation in the United States, Denmark, Estonia, France and Britain for its role in allowing 200 billion euros ($226 billion) of suspicious transactions flow through its Estonian branch between 2007 and 2015.   While the investigations are still ongoing, it is expected that the bank will have to pay billions in fines. The bank also has to deal with a loss in reputation as well as a loss of close to half of its market capitalization since 2018.

ING - $900 million

ING was fined 775 million euros ($900 million) for violating AML regulations “structurally and for years” by not properly vetting the beneficial owners of client accounts and by not noticing unusual transactions through them.   According to Dutch prosecutors, ING accounts were often used for criminal purposes including a notable case where the bank was used to pay bribes by telecommunications company VEON (formerly VimpelCom), in Uzbekistan.   Although ING said it was impossible to estimate the amount of money that was laundered, prosecutors say the amount is near to “hundreds of millions of euros”.

Societe Generale - $ 1.4 billion

French bank Societe Generale agreed to pay $1.34 billion its handling dollar transactions in violation of U.S. sanctions against Cuba and other countries. It will also pay in addition to $95 million to settle dispute over violations of anti-money laundering regulations. The bank already paid 963 million euros to settle a dispute with the Libyan Investment Authority over bribery claims.

To learn about how AI and analytics can be used to reduce the number of suspicious transactions and bribes flowing through your bank, read our “Advanced analytics for AML professionals” blog post or contact us.

About Anu Sood

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.

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