ABN Amro’s in hot water, sobering news has come from Estonia and PayPal is under the microscope in Australia.

We share some of the most poignant financial crime stories from the week of 23 September 2019.

Dutch Probe Hits Reputation

Europe’s money laundering woes have gone from bad to worse as ABN Amro has announced a criminal probe over allegations of failing to submit suspicious activity reports and monitor clients.

News of the probe hit the bank’s share price – down to its lowest price in over three years. The bank has admitted to facing an investigation concerning Dutch anti-money laundering and counter funding of terrorism law but hasn’t commented further.

The probe has caused uncertainty for shareholders but the bigger concern is around whether or not money laundering has actually occurred.

That an accusation of money laundering is enough of a reputational hit to cause share prices to tumble is a stark reminder of the value of keen regulatory compliance. It’s a poor look for the government-owned bank. And the government is sure to struggle even more with selling off the 56% of the bank it still owns following the bailout in 2009.

Former Head of Danske Bank Unit Found Dead

The Danske Bank money laundering scandal has reached an unfortunate conclusion. Aivar Rehe, the former head of Danske Bank’s Estonian unit, central to the €200 billion affair has been found dead in an apparent suicide.

Following a search for the former head, who went missing on Monday, his body was found near his home on Wednesday. Mr. Rehe had become a witness in the scandal and police have ruled out any further investigation.

Although the scandal related to the Estonian branch of Danske Bank, Mr. Rehe wasn’t under investigation himself and was not a suspect in the money laundering probe. However, Mr. Rehe did express that he felt responsible for the criminal activity earlier this year.

The event is a stark reminder of how impactful compliance is and how far-reaching the consequences can be for illicit activity.

Under AUSTRAC’s AML Microscope

PayPal Australia is under scrutiny this week. On Tuesday the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced that it had ordered an external audit of the payments firm to confirm whether its compliance system was sufficient.

The inquiry comes after a similar call by the Australian government agency in June to investigate Afterpay, a company in the ‘buy now, pay later’ financial space. And it’s being carried out amid concerns that online payment platforms like PayPal are vulnerable to the unwitting facilitation of illicit activity, in particular, the sexual exploitation of children in the APAC region.

PayPal has been quick to point out that there’s no evidence to suggest it has been used to make any money transfers involving child exploitation rings or those associated with such activities.

The US-based company stated that its Australian branch detected an issue with its reporting processes around international fund transfer instructions (IFTI) and reported it to AUSTRAC. Now, PayPal is working closely with the agency to address the matter.

The payments provider is working to correct the issue and fulfil the requirements set out in Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The audit, conducted at PayPal’s expense, will be performed by an AUSTRAC-appointed independent auditor and take up to 120 days to complete.

This issue isn’t unique to PayPal or even online payment platforms. It serves to highlight the focus on money laundering and counter-terrorism financing’s far-reaching effects.

Governments and law enforcement bodies worldwide are stepping up their compliance monitoring. And since compliance, especially for companies with a multi-national or cross-border footprint, can be extremely complex, this should compel financial institutions to do the same.


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