Germany’s BaFin Orders Deutsche Bank To Increase AML Safeguards

Germany’s Federal Financial Supervisory Authority (BaFin), the country’s central financial regulator, has ordered Deutsche Bank to toughen its anti-money laundering (AML) controls, the agency said in an announcement.

The announcement stated the order was issued “to prevent money laundering and terrorist financing” and that Deutsche Bank must “adopt further appropriate internal safeguards and comply with due diligence obligations, in particular with regard to regular customer reviews.”

It added: “This also applies to correspondent relationships and transaction monitoring.”

The order references the 2018 installation of a regulator at Deutsche Bank to monitor the bank’s progress fighting money laundering, Reuters reported.

“The order is the result of a constructive supervisory dialogue with the BaFin and reflects that the bank continues to attach the highest priority to detecting and remedying possible weaknesses in control processes,” Deutsche Bank said about the latest announcement in a statement, per Reuters.

“We are working intensively to also comply with the new requirements within the given timeframe,” the statement added, according to Reuters.

Deutsche Bank was fined about $700 million in 2017 for failing to stop money laundering, particularly a scheme that saw $10 billion laundered out of Russia, according to Reuters. The U.S. Department of Justice (DOJ) continues to investigate the matter.

PYMNTS reported in April that a number of major financial regulators, including the Financial Crimes Enforcement Network (FinCEN), the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have warned financial institutions (FIs) to be especially vigilant insofar as potential money laundering is concerned.

One factor in the increased risk of potential money laundering is that global financial pressures can erode the profits of FIs and make the cost of running anti-fraud operations increasingly painful.

Separately, Deutsche Bank announced April 30 that its China unit has been approved for open market lending in China.

The company stated in a news release: “As the first Eurozone bank to obtain this qualification, Deutsche Bank China and PBOC will carry out open market business such as the repurchase of treasury bonds, policy financial bonds, spot bond transactions, central bank bill issuance and other trading instruments.”