It is the largest fine ever issued by the FCA for the failure of anti-money laundering controls after the bank was accused of not carrying out diligent customer checks and of failing to detect 2,400 pairs of suspicious ‘mirror-trades’.
The trades, conducted by Deutsche Bank’s Russian branch between April 2012 and October 2014, converted roubles into US dollars to covertly transfer $10bn out of Russia, an act that is “highly suggestive of financial crime”, the FCA said.
The regulator’s recent fine comes just a day after the New York Department for Financial Services, who they partnered with on the investigation, issued its own fine of $425m to the bank for the “missed numerous opportunities to detect, investigate and stop the scheme due to extensive compliance failures”, according to Financial Services superintendent Maria T. Vullo.
In a statement issued on Tuesday, FCA director of enforcement and market oversight Mark Steward, said the failings of the bank’s AML controls “exposed the UK to the risk of financial crime”.
“The size of the fine reflects the seriousness of Deutsche Bank’s failings. We have repeatedly told firms how to comply with our AML requirements and the failings of Deutsche Bank are simply unacceptable. Other firms should take notice of today’s fine and look again at their own AML procedures to ensure they do not face similar action,” Steward added.
Deutsche Bank has agreed to pay £163, 076, 224 to the FCA and qualified for a 30% reduction for settling the investigation early.
The FCA confirmed the bank had been “exceptionally cooperative” during the investigation and had promised to commit to a large-scale remediation programme to correct its AML control framework.
