FCA Fines Commerzbank London $47.5 Million For AML Failings


Germany’s Commerzbank London has agreed to pay a fine of £37,805,400 — about $47.45 million — “for failing to put adequate anti-money laundering (AML) systems and controls in place between October 2012 and September 2017,” Britain’s main bank regulator said in a news release on Wednesday (June 17).

“Commerzbank London’s failings over several years created a significant risk that financial and other crime might be undetected,” Mark Steward, executive director of enforcement and market oversight for Britain’s Financial Conduct Authority (FCA), said in a statement accompanying the announcement. “Firms should recognize that AML controls are vitally important to the integrity of the UK financial system.”

A Commerzbank spokesman could not immediately be reached for comment, but Britain’s Guardian newspaper quoted an unnamed bank spokeswoman as saying: “Commerzbank has cooperated fully with the Financial Conduct Authority to mitigate any potential compliance risks promptly and appropriately. The FCA investigation relates to the time period of October 2012 to September 2017. The bank has successfully remediated and addressed the deficiencies that were the subject of the investigation.”

Detailing the grounds for the fine, the FCA said Commerzbank’s London operation failed to “Conduct timely periodic due diligence on its clients, which resulted in a significant number of existing clients not being subject to timely know-your-client checks.” The FCA said too many clients were allowed to skip certain monitoring because they were allowed to fall under an “exceptions process” that ran “out of control.”

In addition, the regulator said the bank did not address “long-standing weaknesses in its automated tool for monitoring money laundering risk on transactions for clients” and failed to have “adequate policies and procedures in place when undertaking customer due diligence on clients.”

The FCA said Commerzbank has taken recent steps to address the problems but ignored three prior alerts from the regulators.

Commerzbank is Germany’s third-largest bank, with assets of $478.40 billion, according to recent Standard & Poor research. The same research ranked Commerzbank 62nd largest in the world by assets.

The Financial Conduct Authority said the fine was reduced by 30 percent because Commerzbank agreed early in the investigation process to resolve the regulator’s concerns.