ABN Amro NV Dutch bank is facing a major money-laundering scandal after it managed to overcome unregulated cryptocurrencies risks earlier in 2019.
Now, the bank is in the midst of a criminal probe after allegedly failing to report suspicious transactions and vetting its clients adequately according to Bloomberg reports on Sept. 26.
The company has had its highest plummet since June 2016, as the shares slump by almost 10.3% in Amsterdam trading recently. Therefore, the bank — which is 50% government-owned following a costly bailout — as Bloomberg notes, has had its Tier 1 bonds falling the most in six months.
Violation of financing laws
Besides its alleged compliance failures, ABN AMRO also faces investigations under Dutch terror financing and anti-money laundering laws. However, the Dutch prosecutor’s office has not disclosed the exact details of the investigation.
This July, ABN AMRO announced that it had to conduct better due diligence into its 5 million retail clients after the Netherlands’ central bank served it with a warning.
To further bolster its credit card, small business lending and consumer banking operations, the firm spent about €220m. Specifically, the €85 million it set aside in 2018, the firm also provided an additional €114 million for checks in Q2.
According to the bank, sanctions from authorities are just a tip of the iceberg since it anticipates a possible fine whose amount is not yet known at this time.
ABN AMRO has managed to triple its staff numbers — to cover more than 1,400 — in compliance, anti-money laundering and financial crime areas according to as per the Financial Times reports. The Dutch government has pledged to at one time sell off its 56% stake in the bank following this success.
Due to “serious shortcomings” in curbing financial crime as well as facilitating money laundering through its accounts caused ING Group, ABN AMRO’s rival, to pay a record fine last year.
Scrutiny of Banks
This week, law enforcement officials decided to raid Deutsche Bank AG because of its Estonia’s unit money-laundering scandal.
A senior press officer of ABN AMRO said this May that the bank would be discontinuing the launching process of a custodial Bitcoin (BTC) wallet, after concluding that
“Cryptocurrencies because of their unregulated nature are at the moment too risky assets for our clients to invest in.”