ING Fined in Laundering Probe -- WSJ
05 Settembre 2018 - 09:02AM
Dow Jones News
Banks world-wide are under pressure to clamp down on illegal
funds in the system
By Margot Patrick and Max Colchester
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 5, 2018).
Banking group ING Groep NV has agreed to pay a record European
fine of EUR775 million ($899.8 million) to settle an investigation
by Dutch prosecutors into money laundering failings, as watchdogs
scramble to staunch flows of illicit money after a spate of
high-profile scandals.
Also Tuesday, Danish lender Danske Bank saw its shares tumble
6.5% following a report that local prosecutors had uncovered a
higher than expected tally of allegedly illegal Russian money
moving through its Estonian branch.
Banks world-wide are under increasing pressure to clamp down on
the trillions of dollars' worth of illegal money flowing through
the global financial system.
The U.S. has led the way in policing banks in the past decade.
Since 2008, it has imposed around $23.52 billion in fines,
according to consultants Fenergo, hitting lenders whose ineffective
systems officials say have let clients launder money out of
countries such as Mexico, Russia and Venezuela. In contrast,
European regulators and prosecutors extracted $1.7 billion over
such breaches in the same period, including Tuesday's ING fine,
according to the consultants.
The EU's anti-money-laundering laws are policed by a patchwork
of local regulators, which critics say leaves it open to criminal
abuse.
More recently, local regulators have toughened their stance
after embarrassing data leaks from whistleblowers on company money
laundering and tax avoidance and criticism that the authorities
have been too meek in pursuing such transactions.
ING shares fell 2.6% Tuesday following the announcement as Dutch
prosecutors said it had been "seriously deficient" as a gatekeeper
of the financial system. The bank, for instance, handled bribes
paid by telecommunications company VimpelCom Ltd. to the daughter
of Uzbekistan's former president and didn't report the suspicious
transactions to regulators for several years, the prosecutors said.
In 2016, Amsterdam-based VimpelCom, now called VEON Ltd., paid $795
million to the U.S. and Netherlands to settle the matter.
Other infractions ranged from poor client record-keeping to
helping a Suriname client launder money through electronic payment
terminals.
Danish authorities have been investigating Danske Bank since a
whistleblower flagged issues at its Estonian branch in 2013. The
Financial Times reported Tuesday that consultants had found that up
to $30 billion of Russian money flowed through the Baltic branch,
far higher than previously thought. In a statement, Danske said it
wasn't able to verify the number. The bank expects to publish the
findings of an internal investigation into the matter later this
month.
"The main concern for investors remains whether the U.S.
regulator becomes involved," Citigroup analysts said. So far Danish
and Estonian authorities are leading investigations, but U.S.
involvement could see any eventual fines increase substantially,
analysts said.
U.S. authorities have already heavily punished European banks
for failings in money laundering compliance. In 2014, French lender
BNP Paribas SA pleaded guilty and paid $8.97 billion to U.S.
authorities to settle charges it disguised transactions with
clients in sanctioned countries. Britain's HSBC Holdings PLC in
2012 paid $1.9 billion to settle U.S. charges that included
allowing Mexican drug cartels to launder money through the
bank.
The Danske debacle highlighted ongoing concerns about what is
seen as a particular weakness in Europe: Russian customers using
Nordic and Eastern European banks to shuffle funds across the
European Union.
In February this year, the U.S. Treasury declared Latvia's ABLV
bank an "institutionalized money laundering" operation and cut its
access to dollars. The bank closed down shortly after. Around the
same time, Estonian Versobank AS had its bank license revoked by
the European Central Bank after regulators found money laundering
deficiencies.
Write to Margot Patrick at margot.patrick@wsj.com and Max
Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
September 05, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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