BaFin Orders Deutsche Bank to Improve its Money Laundering Procedures

The Federal Financial Supervisory Authority, which is more commonly known as BaFin, announced on Monday that it has ordered Deutsche Bank AG to implement a number of measures to prevent money laundering and terrorist financing.

Specifically, the regulator has ordered that the German investment bank takes appropriate internal safeguards and complies with the general due diligence obligations as set out in Germany. The order is based on section 51 (2) sentence 1 of the German Money Laundering Act. The notice became final on September 21, 2018.

To make sure Deutsche Bank takes the appropriate steps towards fulfilling the order, BaFin has appointed a special representative to monitor the firm’s implementation of the measures. The representative will report and assess the firm’s progress to BaFin.

Regulators Crack Down on Lackluster Money Laundering Procedures

In recent months, large banks have come into the spotlight for facilitating money laundering due to insufficient procedures to prevent such instances occurring. One bank to make headlines in recent weeks was Danske Bank.

According to a report from The Wall Street Journal, US law enforcement agencies are looking into Danske Bank in relation to money laundering. The news outlet wrote: “The [US] Justice Department, Treasury Department, and Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission [SEC] are each examining Danske Bank after a confidential Whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term complaint was filed to the SEC more than two years ago.”

The bank is accused of facilitating an estimated $150 billion in money laundering flows which were held in non-Estonian customer accounts at the bank’s Estonian branch from 2007 to 2015. The money came from countries such as Russia, Azerbaijan, and Moldova.

Deutsche Bank was linked to the rumors, with the news outlet also reporting that: “The whistleblower complaint identified Deutsche Bank AG and Citigroup Inc., both overseen by U.S. regulators, as involved with transactions into and out of Danske Bank’s Estonian branch.”

Earlier this month, ING also got slapped with fines and other payments totaling €775 million ($900 million) in relation to money laundering. As a result, the firm’s Chief Financial Officer, Koos Timmermans, will step down from his position.