ING feels sting of €775m fine for money laundering mishaps
ING has been hit with a €775 million fine by the Dutch Public Prosecution Service (DPPS) for lapses over its money laundering controls.
The bank says there were “serious shortcomings” in the execution of customer due diligence (CDD) policies to prevent financial economic crime (FEC) at ING Netherlands in the period investigated (2010-2016). As a result, customers were able to misuse accounts.
ING has also initiated measures against a number of (former) senior employees with “broader responsibility” for the safeguarding and execution of FEC CDD policies and procedures, including holdbacks of variable remuneration and suspension of duties.
“As a bank we have the obligation to ensure that our operations meet the highest standards, especially where it comes to preventing criminals from misusing the financial system. Not meeting those standards is unacceptable and ING takes full responsibility,” says Ralph Hamers, CEO of ING.
Under the terms of the agreement with the DPPS, ING has agreed to pay a fine of €675 million and €100 million for disgorgement.
The bank has also undertaken an internal investigation, the results of which have been shared with the Dutch Central Bank (DNB).
In terms of specific failings, ING explains that CDD files were missing or being incomplete, assignment of incorrect risk classifications, the failure to have the (periodic) CDD review process in order, failure to exit business relationships in a timely manner, insufficient functioning of the post-transaction monitoring system, classifying clients in the wrong segments and insufficient availability of qualitative and quantitative human resources.
This laxity meant clients were able to use their bank accounts for, inter alia, money laundering practices for a number of years.
The rest of this report is the usual disclaimer that a bank issues when corruption goes on. We’ve read it all before.
In the investigations no evidence or indications were found of (former) employees having actively cooperated with clients who used or may have used banking services for potential criminal activities nor indications of (former) employees having received personal gains.
The identified shortcomings that occurred in the period investigated are not attributable to some individual persons but rather collective shortcomings at all responsible management levels, i.e. business, compliance and control functions.
ING has also received information requests from the US Securities and Exchange Commission (SEC).
The bank expects that this matter will also be resolved with the SEC without further payment or the imposition of further conditions.