Germany’s financial regulator, BaFin, has imposed a record penalty of EUR 45 million on JPMorgan over shortcomings in its anti-money laundering (AML) processes. The fine marks the largest ever levied by the authority and follows findings that the Frankfurt-based unit of the US bank repeatedly delayed filing mandatory suspicious activity reports.
According to BaFin, the lapses occurred between October 2021 and September 2022, when the bank ‘systematically’ submitted such reports beyond the required deadlines. These filings, known as suspicious activity reports (SARs), are used by financial institutions to alert regulators to transactions that may be linked to illicit conduct.
Under Germany’s Money Laundering Act, banks are required to report transactions that might be linked to money laundering or terrorist financing to the country’s Financial Intelligence Unit (FIU). Prompt reporting allows authorities to investigate and, if necessary, forward cases to law enforcement.
JPMorgan responds in the context of ongoing expansion plans
In response, representatives from JPMorgan said the matter related to past compliance issues and that the timing of the delayed reports had not disrupted any official investigations. They added that the bank remains focused on improving its ability to detect and report financial crime.
JPMorgan’s presence in Germany has expanded significantly, driven by the country’s large pool of wealthy clients, its fintech sector, and a stable regulatory framework. Despite the fine, the bank has continued to advance its strategic plans in the region. Earlier this year, it confirmed that it intends to launch its Chase-branded digital retail bank in Germany during the second quarter of next year, marking its first consumer banking venture in the country.
