"By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime."
This is the largest financial penalty for AML controls failings ever imposed by the FCA, or its predecessor the FSA.
The FCA says it found "significant deficiencies" throughout Deutsche Bank’s AML control framework in the UK.
The failings subsequently allowed its Russia-based subsidiary, DB Moscow, to transfer more than $6 billion from Russia, through Deutsche Bank in the UK, to overseas bank accounts in a process known as "mirror trading."
The purpose of the mirror trades was the conversion of Roubles into US Dollars and the covert transfer of those funds out of Russia, which the FCA says is "highly suggestive of financial crime".
A further $3.8 billion in suspicious “one-sided trades” also occurred. The FCA believes that some, if not all, of an additional 3,400 trades formed one side of mirror trades and were often conducted by the same customers involved in the mirror trading.
However the regulator stressed that Deutsche Bank was "exceptionally cooperative" during the investigation and has committed significant resources to a large scale remediation programme to correct the deficiencies in its AML control framework and customer files.
Mark Steward, Director of Enforcement and Market Oversight at the FCA, said: “Financial crime is a risk to the UK financial system. Deutsche Bank was obliged to establish and maintain an effective AML control framework. By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime.
“The size of the fine reflects the seriousness of Deutsche Bank’s failings. We have repeatedly told firms how to comply with our AML requirements and the failings of Deutsche Bank are simply unacceptable. Other firms should take notice of today’s fine and look again at their own AML procedures to ensure they do not face similar action.”
