Raiffeisen Bank undergoes AML controls investigation

Informed of the inquiry by the regulator in January 2023, Raiffeisen Bank International underlined in its annual report that, as per FMA’s interpretation, the bank did not sufficiently convince itself that it had appropriate due diligence procedures in place when it came to customers of their own correspondent banking business. Therefore, the FMA believes that RBI failed to comply with its administrative obligations fully. A spokesperson from RBI mentioned to Reuters that the investigation’s findings related to payments up to 2020, however, the regulator is currently examining payments processed between 2017 and 2020, in an inquiry that could potentially lead to fines.

The announcement follows the group’s probe of the US sanctions authority, the Treasury Department’s Office of Foreign Asset Control. At that time, the investigations were related to payments involving Russia and data revealed by the International Consortium of Investigative Journalists in a project labelled 'Cyprus Confidential'. In its current annual report, RBI mentioned the US inquiry, depicting OFAC’s attempts to clarify the payments business sustained by the financial institution with US correspondent banks concerning developments related to Russia and Ukraine. The bank also underlined that a breach of US sanctions may result in fines, the freezing of accounts, and termination of business relationships with US correspondent banks.

As more banks released their annual reports for 2023, some of them stated investigations related to compliance with money laundering regulations in several countries. Prior to Raiffeisen’s announcement, the Financial Conduct Authority (FCA) initiated an investigation into Lloyds Banking Group’s AML controls in the UK. The bank’s annual report detailed that the probe was regarding its compliance with the money laundering regulations in the region and the FCA’s rules and principles of business, focusing on its controls framework. Moreover, the report underlined that Lloyds had been cooperating with the investigation and was not able to estimate the potential financial impact of the probe.

Furthermore, the FCA extended its investigations to other banks in the UK, including Barclays. The bank disclosed in its annual report that the regulator probed its compliance with money laundering regulations. However, it was later informed that the FCA intended to close its investigation.

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