Dutch Central Bank Fines ABN AMRO Bank $9.3 Million (€8.5 Million) for Serious Failures in Money Laundering Controls & Customer Due Diligence from 2023 to 2024, Red Flags Include Large Cash Withdrawals by Individuals, Transactions in High-Risk Countries, Large & Frequent Commission Payments, Use of Intermediaries by Customers to Bypass Russia Sanctions and Investigations Closed & Without Follow-Up (Essential Information Missing or Not Provided by Customers)

Tackling money laundering is a priority for the government because it is key to effectively fighting all manner of serious crime. Concealing the origin of criminal proceeds enables perpetrators to steer clear of the investigative authorities and enjoy their ill-gotten gains undisturbed. The Wwft aims to ensure that our financial system is not abused for money laundering and terrorist financing. Under this legislation, banks act as gatekeepers and are obliged to carry out anti-money laundering controls. This means that banks must know who their customers are, where the customers’ money comes from and what customers intend to do with financial products, e.g. payment accounts. Banks run the risk of giving malicious parties access to its financial products. Once customers are through the gate, the bank must monitor them on an ongoing basis and report unusual transactions to the Financial Intelligence Unit (FIU-NL) so that the investigative authorities can examine suspicious transactions. Banks must apply a risk-based approach, meaning that customers with a higher risk require more extensive due diligence than those with a lower risk.

Non-compliance

DNB investigated how ABN AMRO conducts customer due diligence on customers with increased integrity risks. In the five customer files discussed in the fining decision, concrete risk indicators were identified, such as large cash withdrawals by private individuals, transactions involving high- or increased-risk countries, large and frequent commission payments, potential involvement in dual-use goods, and signals that could indicate circumvention of sanctions against Russia by ABN AMRO customers, including through the use of intermediaries. ABN AMRO failed to investigate these signals with sufficient depth and did not act decisively enough to adequately mitigate the associated risks. In such cases, a risk-based approach requires enhanced and critical scrutiny. ABN AMRO relied to a significant extent on customer explanations without adequately verifying them against objective and verifiable information. Even where essential information was missing or customers failed to fully comply with information requests, investigations were often closed despite the higher risks, without appropriate follow-up inquiries or adequate measures. In addition, ABN AMRO did not consistently identify and assess relevant risk indicators in conjunction with one another.

These findings indicate a structural lack of depth in customer due diligence, which DNB considers serious.

DNB’s enforcement approach is aimed at ensuring compliance with the Wwft, whereby banks are expected to apply a risk-based approach in preventing and combating money laundering. Particularly in higher-risk situations, DNB expects banks to do more to prevent misuse of their services. Given the nature, seriousness and extent of the shortcomings, DNB considers the imposition of an administrative fine necessary and appropriate.

Amount of the fine

The fine imposed for the violation committed by ABN AMRO has been set at €8.5 million, in accordance with DNB’s General Fine Policy. In determining the amount of the fine, DNB took into account that ABN AMRO is a large undertaking with substantial financial capacity. In DNB’s view, the violation is serious and culpable. At the same time, DNB has taken into account the measures initiated by ABN AMRO to address the shortcomings. DNB has also weighed positively ABN AMRO’s constructive and cooperative attitude in its remediation efforts.

Fine with simplified settlement

DNB and ABN AMRO have resolved this fining procedure through a simplified settlement, in accordance with the AFM and DNB policy rule on simplified settlement of fines. This means that ABN AMRO acknowledges the facts underlying the established violation and accepts the fine. Consequently, ABN AMRO will not lodge an objection against the fine. In return, DNB reduced the fine from €10 million by 15% to €8.5 million and issued an abbreviated fining decision.