29 Apr 2019
The Royal Bank of Scotland (RBS) Group has launched an internal investigation into whether its subsidiary Coutts and Co. and a unit of ABN Amro processed payments linked to a Russian and Lithuanian money laundering scheme.
The Edinburgh-based lender disclosed in a quarterly earnings filing Friday that the probe had been prompted by media reports of alleged money laundering by Russian and Lithuanian entities between 2006 and 2013. The banking group said in December that it had responded to regulatory data requests about potential Russian money laundering between 2010 and 2014.
“RBS is investigating these reports, and in particular whether the relevant business unit of ABN Amro was part of the business acquired by RBS in 2007,” the banking group said in the Q1 results, which also cited income growth uncertainty linked to Brexit.
Last month, the Organized Crime and Corruption Reporting Project (OCCRP) and Dutch media outlets said that leaked documents indicated that an ABN Amro unit acquired by RBS in 2008 processed approximately €190 million in transactions linked to the so-called “Troika Laundromat.”
The Russian money laundering network purportedly transferred $4.8 billion in suspect funds through a now-defunct Lithuanian bank, the media outlets said.
In March, RBS Chairman Howard Davies told Bloomberg Television that he believed “some of the Russian money went through an ABN Amro entity which we acquired in 2008 and a business which has been closed down subsequently. That makes it difficult to know whether this was before we bought it or after we bought it, who is responsible for it.”
The UK’s Financial Conduct Authority in 2017 disclosed an investigation into potential money laundering by RBS clients linked to a separate Russian money laundering network. Citing leaked banking records obtained by OCCRP and Noyava Gazeta, the Guardian reported earlier that year that RBS had handled over $113 million in suspect Russian funds.
On Thursday, the banking group announced the pending resignation of its chief executive, Ross McEwan, as it gears up to regain private ownership following a state bailout in 2008.
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