BaFin Demands Deutsche Bank to Tighten its AML Controls

  • Richard Marley
  • May 03, 2021
  • 2 minutes read
  • 163

The financial regulatory authority in Germany, BaFin (Federal Financial Supervisory Authority) has required Deutsche Bank to tighten its AML (Anti-Money Laundering) controls.

This was demanded in the recent announcement by the agency and it stated that “to prevent money laundering and terrorist financing, adopt further appropriate internal safeguards and comply with due diligence obligations, in particular with regard to regular customer reviews.”

The requirement also covers correspondent relationships and transaction monitoring. 

This order has been made in reference to the installation of a regulator at Deutsche Bank in 2018 to monitor the bank’s progress against financial crimes. 

“The order 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. We are working intensively to also comply with the new requirements within the given timeframe,” Deutsche Bank said about the latest announcement in a statement. 

The bank was penalised up to $700 million 4 years ago for failing to curb money laundering, especially a scheme that laundered up to $10 billion out of Russia. The Department of Justice (DOJ) is still investigating the matter.

A number of famous and significant financial regulators like Financial Crimes Enforcement Network (FinCEN), the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), has warned the financial institutions to be extra cautious regarding the possibility of money laundering. 

A key factor in the rising threat of money laundering is that the financial pressure across the globe can ruin profits of financial institutions and the cost of running an operation regarding the anti-fraud might be too much. 

On a separate account, the German bank has announced that the approval for its China unit has been acquired and it will now be able to open market lending in China. 

The company stated that the Deutsche Bank has become the first European bank to acquire this qualification. Along with the People’s Bank of China, Deutsche Bank will now carry out open market businesses in China. The open market businesses include the repurchase of treasury bonds, transactions of spot bong, policy financial bonds, bill issuance of the central bank and other trading catalysts.