Money laundering: ING bank fined €775m over due diligence, client on-boarding
05 Sep 2018

Dutch bank ING Groep will pay 775 million euros (about $900 million) in a settlement with the Dutch Public Prosecution Service (DPPS) over its poor anti-money laundering controls which in some cases allowed customers to launder cash for years.

A DPPS investigation established ‘serious’ shortcomings at the lender, including that customer due diligence (CDD) files were missing or incomplete, clients were classified in the wrong segments and there was an insufficient availability of human resources.

It also found the bank failed to exit business relationships in a timely manner, and there was insufficient functioning of the post-transaction monitoring system.

“During the period investigated the execution of ING Netherlands’ FEC [financial economic crime] policies resulted in the termination of ING’s relationship with thousands of clients,” the bank said, “nevertheless the shortcomings identified resulted in clients having been able to use their bank accounts for, inter alia, money laundering practices for a number of years.”

Under the terms of the agreement, ING has agreed to pay a fine of €675 million and €100 million for disgorgement.

“ING sincerely regrets that as a result of the above shortcomings ING Netherlands did not adequately fulfil its role as gatekeeper to the financial system, helping fight financial crime,” it said.

The fine is considered to be one of the biggest issued by Dutch prosecutors.

“The Dutch authorities have based the size of the fine on ING’s financial strength and ‘ability to pay’,” ING explained.

“The size of the fine also reflects the seriousness, extent and duration of the identified shortcomings, but also expresses the fact that it was not possible to determine to which extent and for what amounts bank accounts at ING in the Netherlands were actually misused.”

It added that is has taken action, such as holding back remuneration, against a number of (former) employees in senior management positions who had a broader responsibility for the execution of financial economic crime CDD policies.

Read more:

Money laundering at Danske Bank: Lessons for financial crime professionals (Part 2)

Standard Chartered faces ‘substantial’ UK fine over poor financial crime controls

Confessions of a compliance officer: Do bankers really believe in the new culture?

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