Austrian Regulators Fine Raiffeisen Bank International for Money Laundering Lapses

Austrian regulators have imposed a fine of just over 2 million euros ($2.1 million) on Raiffeisen Bank International (RBI) for deficiencies in its money laundering controls, the country’s Financial Market Authority announced on Friday.

The record fine in Austria was levied due to lapses identified in RBI’s money laundering and terrorism financing checks concerning two correspondent banks, according to the regulators. The specific correspondent banks involved were named as Cuba and Bahrain by a source familiar with the matter.

The penalty, while significant within Austria, underscores ongoing scrutiny faced by RBI, particularly regarding its business in Russia. The United States, with its influence over international financial transactions, has been particularly assertive in scrutinizing RBI's ties to Russia.

Reuters reported last month that RBI received a written warning from the U.S. Treasury, indicating potential restrictions on its access to the U.S. financial system due to its Russian dealings. This warning represents escalated pressure from Washington, which has been investigating RBI’s activities in Russia for over a year.

Despite widespread disengagement from Moscow following its invasion of Ukraine, Austria maintains significant ties with Russia, including critical energy pipelines and financial flows through Vienna.

RBI had previously committed to divesting its Russian operations under pressure from global regulators. However, progress on this front has been limited, with the bank's Russian business continuing to facilitate payments for numerous companies amidst the ongoing conflict.

Unlike other Western banks with Russian interests, such as Italy’s UniCredit, RBI’s scale and its reluctance to sever ties present a crucial test of Western resolve in reducing financial links with Russia.

By fLEXI tEAM