Financial Market Authority Initiates Investigations Against Raiffeisen Bank International
The Austrian Financial Market Authority (FMA) has launched an investigation into Raiffeisen Bank International (RBI). The focus is on possible deficiencies in the implementation of money laundering prevention measures, as can be seen from the bank's annual report published today.
Raiffeisen Bank International has been investigated by Austria's financial regulator FMA over anti-money-laundering failures. / Picture: © Raiffeisen Bank International AG / S. Klimpt
The investigations focus on the so-called "know-your-customer" (KYC) principle, which provides for the verification of personal and business data of bank customers to prevent money laundering activities. As part of these checks, the FMA targeted payments from three customers in the period between 2017 and 2020, as reported by ORF. According to RBI's annual report, the bank appears to have failed to fully comply with the obligations resulting from the relevant administrative regulations. RBI was informed of the ongoing investigations in January 2023. The resulting administrative penalty proceedings are still ongoing and could result in the imposition of an administrative penalty.
According to the FMA's assessment, RBI may not have fully complied with its administrative obligations to ensure proper due diligence for its customers in the correspondent banking business, as reported by Reuters. This investigation has attracted attention due to the connection with payments related to Russia and the findings of the Cyprus Confidential project of the International Consortium of Investigative Journalists. RBI, the largest Western bank operating in Russia, is also under investigation by the United States Office of Foreign Assets Control (OFAC) regarding its payments to US correspondent banks in connection with the situation in Russia and Ukraine.
A spokesperson for RBI stated that the bank would appeal against any potential penalty, although no penalty has been imposed to date, as reported by ORF. The investigations in question relate to payments dating back to 2020. The FMA and the RBI have not yet provided any further details on the ongoing investigations.
These developments once again raise questions about the effectiveness of money laundering prevention measures in the banking sector and underline the importance of rigorous compliance with regulatory requirements to ensure the integrity of the financial system.