Raiffeisen Bank International Discloses Investigation by Austrian Financial Regulator FMA

Raiffeisen Bank International (RBI) disclosed Thursday (Feb. 22) that it is being investigated by Austria’s financial regulator, FMA, over alleged anti-money laundering (AML) failures.

The bank said in its annual report that the probe is specifically focused on the bank’s adherence to know-your-customer (KYC) rules, which are designed to prevent money laundering, and involves three customers of its correspondent banking business, Reuters reported Thursday.

“According to the interpretation of FMA, RBI had not sufficiently convinced itself that these banks had appropriate due diligence procedures in place regarding customers of their own correspondent banking business,” the bank said in its Annual Report 2023. “Thus, in the view of FMA, RBI failed to fully comply with its administrative obligations in this regard.”

A spokesperson for RBI told Reuters that the investigation pertains to old payments dating back to 2020.

The regulator’s inquiry, which the bank learned about in January 2023, could potentially result in fines for the bank, according to the report.

While the investigation is ongoing, the RBI spokesperson said that the bank intends to appeal any penalties that may be imposed, per the report.

This investigation has attracted attention due to payments involving Russia and data uncovered in a project known as Cyprus Confidential, an investigation by the International Consortium of Investigative Journalists, the report said.

This news comes as RBI, which is the largest Western bank in Russia, is also under scrutiny by the United States’ Office of Foreign Assets Control (OFAC), according to the report.

The U.S. authorities have been looking into the bank’s payments business with U.S. correspondent banks in light of developments related to Russia and Ukraine since January 2023, RBI said in its annual report.

“As a matter of principle, RBI maintains policies and procedures that ensure compliance with applicable embargoes and financial sanctions and is cooperating fully with OFAC in relation to their request to the extent permitted by applicable laws and regulations,” the annual report said.

In March, U.S. bank Wells Fargo reached settlements of $30 million with the OFAC and $67.8 million with the Federal Reserve Board regarding sanctions-related violations from 2010 to 2015.