German financial regulator, BaFin, has published a statement threatening to take action if Deutsche Bank does not work faster to address failings in its AML measures.
In a brief statement, the regulator said it had ordered the bank to take “specific measures” and would “impose financial penalties” if it did not comply, suggesting there are concerns over whether the bank will meet deadlines set by the regulator.
The full statement said: “On 28 September 2022, BaFin ordered Deutsche Bank AG to take specific measures aimed at preventing money laundering and terrorist financing in order to implement the orders that BaFin issued on 21 September 2018 and 15 February 2019. BaFin has threatened to impose financial penalties in the event that the bank does not comply with these specific measures. The order was issued on the basis of section 51 (2) sentence 1 of the German Money Laundering Act (Geldwäschegesetz – GwG).”
The regulator has not made any further comment on the matter and a Deutsche Bank spokesperson has said the bank is “fully aligned” with BaFin on the necessary measures and has “already completed a large proportion of them,” adding that the bank has “and will continue, to invest the resources and management attention necessary to improve our control environment and to meet regulatory expectations.”
Deutsche has been blighted by AML regulatory failures in recent years. In 2018, BaFin installed auditor giant KPMG as a special monitor at the bank to oversee progress in this area – the first time the regulator had ever taken measures of this kind.
In 2017, the bank was hit with US$700m worth of fines from US and UK regulators for failing to prevent money laundering in relation to US$10bn worth of Russian-owned assets.
In 2019 and 2020, BaFin fined the bank for failing to properly report suspicious transactions, including payments linked to the now infamous Danske Bank money laundering scandal.
In January 2021, Deutsche paid US$130m to settle an investigation by the US Department of Justice into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme. The charges were the result of a scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, and a separate scheme involving manipulation of the precious metals market.
The bank appointed a new Global Head of Anti-Financial Crimes and AMLO in July last year. Salama was previously Global Head of Litigation and Regulatory Enforcement as well as being General Counsel for the Americas.