Commerzbank London fined for anti-money laundering failings

The FCA has fined Commerzbank AG (London Branch) £37,805,400 for failing to put adequate anti-money laundering (AML) controls in place between October 2012 and September 2017.

The regulator suggested Commerzbank London was aware of its weaknesses and failed to take effective steps to fix them, despite the FCA raising concerns in 2012, 2015 and 2017.

These weaknesses also persisted during a period when the FCA said it was publishing guidance on steps that 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 states that firms operating in the UK, including branches of overseas firms, must take “reasonable care” to organise and control their affairs responsibly, and to “establish and maintain” an effective risk-based AML control framework.

FCA executive director of enforcement and market oversight, Mark Steward, said: “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.”

The FCA’s investigation identified several failings, including Commerzbank London’s failure to conduct timely periodic due diligence on its clients, which resulted in a significant number not being subject to timely know-your-client checks. By 1 March 2017, the FCA revealed 1,772 clients were overdue updated due diligence checks.

The investigation also found the firm had failed to address long-standing weaknesses in its automated tool for monitoring money laundering risk on transactions for clients.

Commerzbank London has since undertaken a remediation exercise, according to the FCA, to bring its AML controls “into compliance”.

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