Global financial institution Deutsche Bank has been hit with a $186 million penalty from the United States Federal Reserve, a consequence of violations pertaining to sanctions and identified high-risk banking operations in its US affiliates.
The sanctions issued by the Federal Reserve, disclosed on Wednesday, represent another installment in the series of financial sanctions the German financial giant has had to shoulder from regulatory bodies in both Europe and America. These sanctions result from breaches in anti-money laundering regulations over a period spanning several years.
The Federal Reserve expressed its decision to levy the fine on Deutsche Bank's New York subsidiary, which comes in the aftermath of an investigation concluding an unsatisfactory rate of remedial actions in compliance with the consent orders of 2015 and 2017. These orders were specifically related to anti-money laundering measures and violations of sanctions.
An additional segment of the fine imposed was a consequence of questionable operational procedures followed by Deutsche Bank in dealing with the Estonian unit of Denmark's Danske Bank. The Federal Reserve highlighted Deutsche Bank's inadequate anti-money laundering controls and deficient governance structures in this association.
Deutsche Bank had engaged in financial transactions amounting to over $267 billion with Danske Bank from 2007 to 2015, a process severely critiqued by the Federal Reserve.
This newly announced financial penalty follows a history of similar fines incurred by the German financial behemoth. In 2017, Deutsche Bank had to cough up nearly $630 million to terminate investigations led by the US and the UK, scrutinizing suspicious Russian equity trades.
The Federal Reserve further imposed a $41 million fine on Deutsche Bank within the same year for its failure to adhere to anti-money laundering regulations.
A series of other regulatory lapses by Deutsche Bank have also attracted penalties in the past. In the previous year, a settlement with the US Securities and Exchange Commission saw Deutsche Bank paying $200 million over lapses in electronic record-keeping.
The New York Department of Financial Services also enforced a $150 million fine on Deutsche Bank in July 2020, a settlement linked to compliance issues related to its association with the now-infamous financier Jeffrey Epstein.
Deutsche Bank's track record of violations extends to a $7.2 billion fine it had to pay in 2017 in the US, a settlement of lawsuits relating to its role in the subprime mortgage debacle that precipitated the global financial crisis.
