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Deutsche Bank, the Bank of Ireland and BNP Paribas have all been penalised for failure to ensure they were doing all they could to identify and prevent laundering.

The US Federal Reserve has announced that it has fined Deutsche Bank $41 million for failing to maintain controls against money laundering in its American operations.

US regulators criticised the bank’s "unsafe and unsound practices." Deutsche Bank agreed to an order requiring it to improve oversight by senior management in complying with anti-money-laundering laws.

The action follows $629 million in penalties being levied against Deutsche Bank in January by New York state and British regulators for lapses in controls that allowed wealthy Russians to allegedly launder about $10 billion in illicit funds through the bank. The lapses enabled some clients in Russia to operate a fake securities trading scheme that moved money out of that country and into offshore accounts.

Bank of Ireland has been fined 3.15 million euros by the country's central bank for “significant failures” in its anti-money laundering and counter-terrorist controls – making it the third Irish bank in six month to face such penalties.

The Central Bank of Ireland said it had fined BOI – the country’s biggest bank – for 12 breaches of the county’s anti-money laundering laws.

“The high volume and range of breaches uncovered as part of the central bank’s investigation into Bank of Ireland point to significant weaknesses in the strength of Bank of Ireland’s implementation of anti-money laundering and counter-terrorist financing legislation," said Central Bank’s Director of Enforcement, Derville Rowland "Such behaviour is unacceptable and falls far short of the standard expected.”

The investigation found that BOI failed to report six suspicious transactions to the police and tax authorities. It also failed to carry out sufficient checks on an overseas politically exposed person.

French authorities have fined BNP Paribas 10 million euros for inadequate anti-money laundering controls.

The penalty followed a 2015 inspection which showed shortcomings in the bank’s provisions for preventing money laundering and terrorist financing.

BNP Paribas, according to investigators, did not have enough staff dedicated to spotting and notifying suspicious transactions. Its methods of detecting unusual customer transactions were described as inefficient.

Rahman Ravelli founder, Aziz Rahman, believes the fines are of relevance to anyone in business – not just those in the banking sector.

He said: “The fact that such major institutions are failing in their attempts to prevent money laundering, and are being heavily penalised for it, should be enough of a warning to anyone in business. This is not a matter that is exclusive to banks.

“A failure to tackle money laundering is a mistake that can prove immensely costly, no matter what line of business you are in.

“We have repeatedly warned about the need to invest proper time and effort into prevention.’’

Three Banks Fined Millions for Poor Money Laundering Controls

Rahman Ravelli

Serious Fraud, Regulatory and Complex Crime Lawyers

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