Commerzbank fined £38m for anti-money laundering failures
Commerzbank London was aware of these weaknesses and failed to take reasonable and effective steps to fix them despite the regulator raising specific concerns about them in 2012, 2015 and 2017.
The FCA says these weaknesses persisted during a period when the FCA was publishing guidance on steps firms could take to reduce financial crime risk, as well as taking enforcement action against a number of firms in relation to AML controls.
The FCA says Commerzbank failed to:
- Conduct periodic due diligence and know-your-client checks on its clients
- Address long-standing weaknesses in its automated tool for monitoring money laundering risk on transactions for clients
- Have adequate policies and procedures in place when undertaking customer due diligence on clients
Financial firms operating in the UK, including branches of overseas firms, must take reasonable care to organise and control their affairs responsibly and effectively, and to establish and maintain an effective risk-based AML control framework.
This means Commerzbank breached Principle 3 of the FCA’s Principles for Businesses, which requires firms to have adequate risk management systems in place.
Mark Steward, FCA executive director of enforcement and market oversight, says: “Commerzbank London’s failings over several years created a significant risk that financial and other crime might be undetected. Firms should recognise that AML controls are vitally important to the integrity of the UK financial system.”
Commerzbank London has undertaken a remediation exercise to bring its AML controls into compliance. It has also conducted an extensive “look-back” exercise to identify suspicious transactions during the period in question.
Commerzbank London agreed to resolve the matter at an early stage of the investigation and therefore qualified for a 30% discount. Without the discount, the financial penalty would have been £54,007,800.