The U.K. financial regulator, the Financial Conduct Authority(FCA), fined Commerzbank London branch £37.8 Million for violating anti-money laundering regulations.
Commerzbank London branch fell short in maintaining adequate anti-money laundering controls and policies. All companies operating in the UK are subject to the British and other applicable Anti-Money Laundering regulations, including branches of transnational companies.
Under the UK AML law (Money Laundering Regulations), companies must:
– Have appropriate risk-based procedures in place when establishing a business relationship or carrying out a transaction
– Apply CDD (Customer Due Diligence) and screen any money laundering risk
– Keep records of CDD data
– Apply EDD (Enhanced Due Diligence) measures when a higher risk of money laundering or terrorist financing is presented
– Establish and maintain anti-money laundering policies based on risk-based approach
Commerzbank, a large international commercial bank, headquartered in Frankfurt, has been forced to carry out remediation exercises to put AML policy and risk management system in place. The Financial Conduct Authority’s visit to Commerzbank London identified the weakness of the bank’s AML system and raised concerns about money laundering risk management.
Commerzbank London had not implemented adequate policies and procedures to ensure compliance with the AML regulations. Examples of the branch AML failings include money laundering risk management negligence such as not identifying risk-risk countries, and not adding 1,110 high-risk customers to its transaction monitoring system.
Commerzbank has initiated a wide-ranging remediation process in respect of its compliance deficiencies. Since Commerzbank has taken early actions to resolve the matter, a 30% discount was given. Without the discount, the fine would have been £54,007,800, not £37,805,400.
Financial Conduct Authority Press Release:
Financial Conduct Authority Final Notice: https://www.fca.org.uk/publication/final-notices/commerzbank-ag-2020.pdf
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