The Federal Reserve System fined Deutsche Bank $186 million.
The regulator stated that this decision was made due to the fact that the financial institution has not made significant progress in correcting shortcomings in its work, which should have been corrected within the framework of previously issued consent orders against the lender to comply with sanctions and measures aimed at suppressing money laundering activities.
The Fed’s press release contains information that the fine relates to consent orders that were issued in 2015 and 2017. The reason for these writs is that the financial institution, during the period of interaction with the Estonian branch of Danske Bank, did not provide an acceptable level of internal control and did not take measures to combat the practice of money laundering.
The regulator’s press release also states that the new consent decree stipulates that the bank must fulfill several important requirements of the previous orders as a matter of priority.
In a second separate enforcement action against Deutsche Bank AG, its New York branch, and other branches in the United States, the Fed announced a written agreement that addresses general deficiencies in the lender’s management and risks, and deficiencies in the control system.
The bank, commenting on the regulator’s decision, last Wednesday, July 19, announced its readiness to support reliable management programs. The financial institution also stated that the practice of coercive measures against it is the result of a historical delay in compliance with old prescriptions and correspondent banking relations that ended in 2015.
The bank’s statement also notes that the Fed recognizes the progress that has been made by the lender over the past few years as part of efforts to eliminate deficiencies in the field of control. Representatives of the financial institution say that the regulator’s measures reinforce the need to fulfill current obligations and complete old obligations related to recovery.
Deutsche Bank also reports on the implementation of several solutions within the framework of activities to eliminate the shortcomings identified by the Fed. The financial institution has increased customer discretion and improved the transaction monitoring system. Also, the lender has increased the number of specialists in combating financial crimes by more than 25%.
The Bank states that taking into account the dynamics of eliminating deficiencies in the structure of activities that have been formed over the past two years, there are grounds to state that there are favorable prospects for the subsequent fulfillment of obligations identified by regulators as necessary measures.
Deutsche Bank in 2019 decided to reduce correspondent banking services. This happened against the background of the launch of an investigation into suspected money laundering in the amount of about $229 billion by the Estonian branch of Danske Bank. These funds were transferred between 2007 and 2015. In 2019, Deutsche Bank stated that in this case it was acting as a correspondent financial institution of Danske Bank in Estonia and had no information about any illegal aspects of transactions.
As we have reported earlier, Moss and Deutsche Bank Partner on Payments via Expense Management Platform.
