Fed fines Deutsche $186 mln for slow progress in money laundering curbs (updated)

WaFd

19/07/2023 17:25

(Adds details and context from paragraph 3, bylines)
    By Pete Schroeder and Chris Prentice
       WASHINGTON, July 19 (Reuters) - The Federal Reserve said
on Wednesday it fined Deutsche Bank and its U.S. affiliates $186
million for failing to sufficiently address money laundering and
other shortcomings flagged by the U.S. central bank.
    Deutsche must prioritize addressing several of those issues
or face "additional and escalated" penalties, said the Fed,
which imposed additional restrictions and ordered the bank to
improve its risk and data management.
    The Fed identified the previous issues in 2015 and 2017
consent orders, which stemmed from deficient controls in
Deutsche's relationship with the Estonian branch of Danske Bank
which ended in 2015.
    In December, Danske Bank pleaded guilty to a bank fraud
conspiracy and agreed to forfeit $2 billion to settle a
long-running Department of Justice probe into billions of
dollars of illicit payments. The bank's Estonia branch allowed
some 200 billion euros ($223.78 billion) in funds from high-risk
clients in Russia and other countries to flow into the U.S.
financial system.
    The Biden administration has cracked down on repeat
offenders to root out corruption and white collar crime.
    In its latest order, the Fed said it found a "significant
portion" of the $276 billion in transactions Deutsche cleared
for Danske involved "high-risk non-resident customers."
Shortcomings in Deutsche's policies on money laundering
persisted after its relationship with Danske ended in 2015, the
Fed said.

($1 = 0.8937 euros)

 (Reporting by Pete Schroeder; Editing by Richard Chang)
 ((Pete.Schroeder@thomsonreuters.com; 202-310-5485;))