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Deutsche Bank to be penalized if long-standing AML concerns are not resolved by the deadline of 2023

Deutsche Bank has been given until the middle of 2023 to improve its AML procedures, or else Germany's financial watchdog BaFin will impose a fine.

The Bonn-based BaFin said in a statement that it had instructed Deutsche Bank to take "specific measures" to stop money laundering and terrorist financing.


In the notification, BaFin urged Deutsche Bank to take action to implement the orders against the bank made in 2018 and 2019.


If the bank does not adhere to the prescribed measures, the regulator has warned to impose a fine.


The statement read: "“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)."


"This information is published on the basis of section 57 of the GwG."


It stated, "The decision has been final and binding since 1 November 2022."

Deutsche said that it was "fully aligned with BaFin on the necessary measures" and added that a "large proportion" of the required actions had been carried out.


Deutsche continued, "We have, and will continue, to invest the resources and management attention necessary to improve our control environment and to meet regulatory expectations."


Since an unprecedented intervention by BaFin in 2018, when it appointed KPMG as a special monitor and ordered the bank to take action on combating money laundering and terrorism financing, the largest banks in Germany have invested more than €2 billion in enhancing compliance procedures.


It is clearly evident from the Friday evening statement that BaFin is dissatisfied with the actions being done by the enormous financial corporation and is concerned that Deutsche may miss the significant deadlines that are due in the middle of 2023.


Following the installation of auditor KPMG to monitor the bank's AML efforts in 2018, according to Reuters, the regulator BaFin ordered Deutsche to tighten its AML framework in 2021.


In addition to saying it sought to tighten controls on "regular customer reviews" when it comes to correspondent banking and transaction monitoring, the regulator last year increased the auditor's scope.


BaFin had never before appointed an external auditor.


Deutsche Bank responded by stating that while controls were being improved, "we are also aware that there is still work to be done."


The order, according to the bank, "is the result of a constructive supervisory dialogue with the BaFin and reflects that the bank continues to attach the highest priority to detecting and remedying possible weaknesses in control processes."


Deutsche stated, "We are working intensively to also comply with the new requirements within the given timeframe."

By fLEXI tEAM



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