Several MLA requests from European regulators for illicit transactions via the Italian branches of ING Bank triggered a probe by the Italian regulator. The investigation confirmed practices of several of the banks customers in online scams between 2016 and 2018. In addition, the regulatory intervention revealed gaps in AML compliance allowing the suspicious transactions to be executed.
The Dutch lender reached a provisional settlement for the amount of 30 million Euros. The agreed voluntary penalty ends the money laundering investigation by the prosecutor in Milan and comes after the bank settled with the regulator in its home country for 775 million Euros last year. The bank was forced to cease further online account opening in Italy in March of this year. It is unknown yet what additional measures are forced upon the bank by the Italian authorities.
ING Bank, among other financial institutions, strengthened its compliance, due diligence and internal procedures after shortcomings were revealed in 2018 that led to the single largest fine in Dutch history. The bank has built a concept called ‘Model Bank’ to serve the European market online. Know your customer and compliance issues are yet to be improved.
Anti-money laundering procedures at European banks are under a magnifier. The European Central Bank revoked the licenses of several banks recently. Financial institutions in Cyprus, Latvia, Malta and Austria were recently stripped of its permission to transact. The recent exposure of widespread and cross border laundromats reveal a systemic challenge.