Deutsche Bank fined $186m by US Federal Reserve
The US Federal Reserve Board has fined Deutsche Bank $186 million citing “unsafe and unsound banking practices” and “violations of the Board’s 2015 and 2017 consent orders with Deutsche Bank relating to sanctions compliance and anti-money laundering controls”.
US Fed fines Deutsche Bank $186m
The Fed says it found that Deutsche Bank made “insufficient remedial progress” in fixing its anti-money laundering controls after initially flagging concerns with the bank back in 2015 and 2017.
It adds that Deutsche Bank “had deficient anti-money laundering internal controls and governance processes relating to its prior relationship with the Estonian branch of Danske Bank”.
Along with the fine, the Fed has also issued a new consent order against Deutsche Bank AG, its New York branch and other US affiliates that requires the firm to prioritise the completion of “several critical requirements” of the Fed’s previous orders. It adds failure to do so may require “additional and escalated formal actions” including additional penalties or corrective actions.
As part of its enforcement actions, the Fed has outlined that it expects Deutsche Bank to prioritise improvements in systems and data to support its AML transaction monitoring; implement a customer due diligence program; establish a framework for transaction monitoring; and complete a satisfactory OFAC compliance review.
Deutsche Bank responds
In response to the two enforcement actions, Deutsche Bank says in a statement: “We are committed to maintaining robust risk management programs with a special emphasis on Anti-Financial-Crime and Compliance controls. The Written Agreement and the Consent Order with the Federal Reserve relate to our historic tardiness in adhering to older enforcement actions and agreements, as well as a correspondent banking relationship we exited in 2015.
“We appreciate that the Federal Reserve recognizes the progress we have made in recent years in remediating and resolving control weaknesses. We also recognize that these actions reinforce the need to ensure we stand by our commitments and close our remediation obligations in the near future.”
As part of its remedial work, the bank states it has taken a number of actions, including enhancing its customer due diligence and transaction monitoring. It also claims to have invested in controls since 2019, including expanding its global Anti-Financial Crime team by more than 25% to more than 2,000 employees.
“Given the momentum we have built in the last two years, we believe we are well positioned to meet our regulators’ expectations,” the bank says.
