Deutsche Bank fined for failure to prevent money laundering

Deutsche Bank must prioritize fixing several of those problems or face “additional and escalating” sanctions, the Fed said, imposing additional restrictions and ordering the bank to improve its risk and data management.

The Fed identified the earlier problems in consent orders from 2015 and 2017, which stemmed from poor controls in Deutsche’s relationship with Danske Bank’s Estonian branch, which ended in 2015.

In December, Danske Bank pleaded guilty to a bank fraud conspiracy and agreed to forfeit $2 billion to resolve a lengthy Justice Department investigation into billions of dollars in illicit payments.

The bank’s branch in Estonia allowed some 200 billion euros ($223.78 billion) in funds from high-risk clients in Russia and other countries to flow into the US financial system.

In its latest order, the Fed said it found that a “significant portion” of the $276 billion in transactions Deutsche cleared for Danske involved “high-risk nonresident customers.” Deficiencies in Deutsche’s policies on money laundering persisted after its relationship with Danske ended in 2015, according to the Fed.

Deutsche Bank said Wednesday that it recognizes the need to strengthen compliance controls in response to the Fed’s fine. “We also recognize that these actions reinforce the need to ensure we meet our commitments and close our remediation obligations going forward.” nearby,” the German bank’s statement said.

The fine will be mainly covered by provisions taken in previous quarters, he added.