Commerzbank’s UK penalty over money-laundering lapses sets the scene for future enforcement

MLex Market Insight

News

4.9 • 9 Ratings

🗓️ 26 June 2020

⏱️ 14 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

A penalty of $47 million imposed on German investment bank Commerzbank by the UK’s financial regulator has provided a timely reminder of the risks posed by fraud, as companies and state actors across the globe face increased risks in the wake of the Covid-19 epidemic. The Financial Conduct Authority imposed the fine after repeated missteps in fighting money laundering by the London branch of Commerzbank. And with the likelihood of similar cases arising as a result of inadequate safeguards during the pandemic, the FCA’s response to Commerzbank may set the tone for future enforcement.

Transcript

Click on a timestamp to play from that location

0:00.0	Hello, welcome back to another MLEX podcast. My name is James Panicki from Mlex's Asia-Pacific team. It's
0:16.4	great to be back in your feed this Friday. Now, in all likelihood, lockdowns as a result of COVID-19 are going to remain part of the
0:25.0	global landscape for some time now.
0:27.6	And along with the social and economic upheaval caused by the coronavirus comes a soaring
0:32.7	level of fraud, with authorities and companies letting down their guard as they scramble to respond to the
0:39.5	demands of this new environment. It's a perfect storm, and it has exposed the high level of
0:45.0	vulnerability of global banks in dealing with money laundering. This issue has come to the fore
0:50.5	in Britain over recent weeks with the Financial Conduct Authority, the UK's financial
0:55.0	regulator, hitting German Investment Bank Commerce Bank with a fine of over 47 million US dollars.
1:02.2	That penalty had everything to do with the bank's missteps in fighting money laundering.
1:07.3	The case obviously predates the COVID pandemic, but it may point to what lies ahead as money laundering cases linked to 2020 start to percolate through the system.
1:17.5	Martin Coyle is an M-Lex, senior correspondent covering anti-bribery and corruption.
1:22.6	Fiona Maxwell is our senior correspondent who writes about financial services and both join me now from London.
1:29.0	Martin, let's start with you. Tell me something about what went wrong at Commerce Bank.
1:33.6	Well, James, thanks for that. So we have a situation where the Commerce Bank is, its London operation was fine for what can only be described as a catalogue of
1:46.6	failures in its money laundering and financial crime department.
1:52.1	It's important to note there wasn't any evidence that any money laundering did take place,
1:57.8	but it was more to do with its failure to have the right processes in place
2:03.0	and its compliance procedures. So it's hit with a 37.8 million pound penalty, which is quite a
2:09.1	big penalty, quite a big hit by the Financial Conduct Authority. And this was for money laundering
2:15.8	failures that went back to October 2012 2012 and they would have been fined
2:21.1	£54 million had they not decided to settle the case earlier and among the failures found by the
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from MLex Market Insight, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of MLex Market Insight and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.