FRB fines Deutsche Bank on insufficient AML
20 July 2023 US
Image: Alex/stock.adobe.com
The Federal Reserve Board (FRB) has issued a consent order and a US $186 million fine to Deutsche Bank as a result of insufficient anti-money laundering controls.
The Board’s actions are the result of what it calls Deutsche Bank’s ‘unsafe and unsound practices’. It reports that insufficient remedial process has been made since the consent orders issued in 2015 and 2017, and that these orders have been violated.
The consent order requires Deutsche Bank to prioritise certain aspects of the Board’s previous orders.
According to the FRB’s statement, Deutsche Bank has deficient anti-money laundering internal controls and governance processes in regard to its earlier relationship with Danske Bank’s Estonia branch. The branch was the subject of a high-profile money laundering investigation.
Additionally, the FSB has issued a written agreement to address ‘general deficiencies’ in the bank’s governance, risk management and controls.
Commenting on the announcement, Rory Doyle, head of financial crime at Fenergo, says: “In this current regulatory landscape, banks must take a proactive approach to strengthen their compliance controls. Leveraging technology to streamline processes and gain a real-time view of risk will enable more effective client due diligence in the detection and prevention of financial crime on a continuous basis.
“As fines against major banks rise, more attention must be paid to corporate governance, anti-money laundering controls, and inspection practices – or firms risk facing the consequences.”
The Board’s actions are the result of what it calls Deutsche Bank’s ‘unsafe and unsound practices’. It reports that insufficient remedial process has been made since the consent orders issued in 2015 and 2017, and that these orders have been violated.
The consent order requires Deutsche Bank to prioritise certain aspects of the Board’s previous orders.
According to the FRB’s statement, Deutsche Bank has deficient anti-money laundering internal controls and governance processes in regard to its earlier relationship with Danske Bank’s Estonia branch. The branch was the subject of a high-profile money laundering investigation.
Additionally, the FSB has issued a written agreement to address ‘general deficiencies’ in the bank’s governance, risk management and controls.
Commenting on the announcement, Rory Doyle, head of financial crime at Fenergo, says: “In this current regulatory landscape, banks must take a proactive approach to strengthen their compliance controls. Leveraging technology to streamline processes and gain a real-time view of risk will enable more effective client due diligence in the detection and prevention of financial crime on a continuous basis.
“As fines against major banks rise, more attention must be paid to corporate governance, anti-money laundering controls, and inspection practices – or firms risk facing the consequences.”
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