ING paid 775 million euros ($897 million) to settle a Dutch money laundering case, prosecutors announced on Tuesday, September 4, 2018.
The settlement splits into a 675 million euro fine and a 100 million euro disgorgement payment to the Dutch government. That second figure matches what ING did not spend on staff and procedures needed to apply anti-money-laundering rules. The bank said the total would be booked against its third-quarter results.
What prosecutors found
The financial prosecution service said ING had failed for years to apply the law meant to stop money laundering and terrorist financing. Background checks on clients fell short, and suspicious transactions were not looked into properly. According to prosecutors, ING “didn’t prevent accounts of ING clients in the Netherlands being used to launder hundreds of millions of euros (dollars) between 2010 and 2016.”
One example involved Vimpelcom, the Amsterdam-based telecom group now called VEON. Tens of millions of euros in bribes paid to gain a foothold in Uzbekistan went through ING, prosecutors said, and the bank reported the transactions late and did not investigate them adequately. In 2016 Vimpelcom agreed in the United States to pay $795 million in penalties over claims that it paid $114 million in bribes to a government official in Uzbekistan.
The BBC reported that the Dutch authorities found no evidence that bank staff deliberately helped customers whose services became part of possible criminal acts. Prosecutors instead cited “collective shortcomings at all responsible management levels.” ING has taken action against some individuals, including clawing back bonuses.
ING’s response
Chief executive Ralph Hamers accepted the findings. “As a bank we have the obligation to ensure that our operations meet the highest standards, especially where it comes to preventing criminals from misusing the financial system,” he said in a written statement. “Not meeting those standards is unacceptable and ING takes full responsibility.”
The bank described “serious shortcomings” in customer due diligence at its Dutch operations between 2010 and 2016. To improve its checks, ING said it has been setting up client risk committees across several units.
The US Securities and Exchange Commission had also asked for information about the Dutch investigations. ING said it expects the matter to be resolved with the SEC “without further payment or the imposition of further conditions.”
Sources
- Dutch bank ING hit with huge fine in money laundering case
- ING Group Fined For Money Laundering, Due Diligence Lapses | PYMNTS.com
