Germany's largest bank has admitted to possible breaches of sanctions against russia

Germany’s Deutsche Bank has admitted to possible breaches of the European Union’s sanctions regime against russia, according to the Süddeutsche Zeitung and the Financial Times.

The bank has identified instances within its retail division where deposits exceeding €100,000 were accepted from individuals subject to EU sanctions. Under EU rules, banks are prohibited from accepting deposits exceeding this amount from russian citizens, residents or legal entities registered in russia.

According to the bank, these cases mainly concern the mass segment of private clients, rather than wealth management or individuals on sanctions lists. However, Deutsche Bank does not rule out that similar breaches may have gone unnoticed previously due to shortcomings in its control systems.

The bank stated that it is “proactively informing the relevant supervisory authorities” of the identified issues and is constantly improving its sanctions compliance procedures.

The violations were identified following the establishment of a special working group tasked with reviewing internal control mechanisms against the backdrop of the tightening of the sanctions regime in Germany in February. Changes introduced in accordance with the EU directive provide for tougher criminal penalties, swifter enforcement and the abolition of transition periods, forcing banks to identify and block potentially prohibited transactions more promptly.

This was preceded by searches at Deutsche Bank’s headquarters in Frankfurt in January. The investigation concerns alleged money laundering linked to russian businessman Roman Abramovich and covers the bank’s transactions from 2013 to 2018. It aims to determine whether the bank was too slow in reporting suspicious transactions.

This case shows that even the largest European banks may struggle to comply with sanctions against russia, which directly affects the effectiveness of the financial pressure Ukraine is counting on.

Source: LIGA.net