Raiffeisen Bank International Faces Dual Investigations Over Anti-Money Laundering Compliance

Austria's Raiffeisen Bank International revealed in its annual report on Thursday that it is currently under investigation by the country's financial regulator, FMA, for alleged anti-money laundering failures. The probe is specifically targeting the bank's adherence to know-your-customer rules, considered pivotal in preventing money laundering activities. Concurrently, the bank, which holds the title of the largest Western bank in Russia, faces scrutiny from the United States' Treasury Department's Office of Foreign Assets Control (OFAC).

The Austrian investigation reportedly revolves around transactions involving Russia, particularly data exposed in the International Consortium of Investigative Journalists' Cyprus Confidential project. According to a source familiar with the situation, the inquiries pertain to payments handled between 2017 and 2020. Despite the regulator's findings being communicated to the bank in January, no penalties have been imposed yet. A spokesperson for Raiffeisen Bank International affirmed the institution's intention to challenge any forthcoming penalties, stressing that the issues under investigation date back to 2020 and earlier.

The bank's annual report discloses that the Austrian regulator's scrutiny centers on transactions involving three specific customers processed during the mentioned timeframe. The outcome of the inquiry could potentially result in financial penalties, as outlined in the report released by the bank. The regulator has indicated that it believes Raiffeisen Bank International may have fallen short of fulfilling its administrative obligations adequately.

Regarding the U.S. investigation, the bank provided an update, mentioning OFAC's efforts to clarify its payments business conducted with U.S. correspondent banks, particularly concerning developments related to Russia and Ukraine. The report highlights the potential consequences of breaching U.S. sanctions, which include fines, account freezes, or the termination of business relationships with U.S. correspondent banks.

Raiffeisen Bank International's acknowledgment of these investigations underscores the ongoing challenges facing financial institutions regarding compliance with anti-money laundering regulations and international sanctions regimes.

By fLEXI tEAM