ING has agreed to an out-of-court settlement with the Dutch public prosecutor, facing potential money laundering charges.
The Dutch lender will pay €775m – €675m and repayment of €100m – admitting failure to monitor capital movement effectively. The prosecutor accuses ING of allowing clients to move millions without flagging suspicious transactions from 2010 to 2016.
The Dutch prosecutor believes the lender has allowed the laundering of at least €150m, signalled as a transaction of a “woman’s underwear trade.”
Among the suspicious transactions that should have been reported is the alleged multi-million-euro kickback paid by VimpelCom (Veon) telecom to the daughter of the former Uzbek president, Gulnara Karimova. VimpelCom used a Dutch account, channelling the transaction via Gibraltar.
Karimova is in custody following a conviction for embezzlement.
Dutch authorities claim the lender failed to heed central bank (DNB) warnings in 2008. ING is suspending members of senior management and withholding bonuses. However, the prosecutor has pointed to systemic failure, as ING failed to staff its compliance department adequately.
ING is not alone in its failure. Denmark’s Danske Bank has also admitted failure to monitor clients in Estonia and is conducting its own internal investigation.
European regulators are considering a tighter regulatory framework to tackle financial crime, pending the approval of Commission proposals by the Eurogroup later this week. Part of the challenge at hand is a failure to implement the existing regulation on cross-border cooperation. However, new legislation is unlikely before the new European Parliament takes office next year.
Besides the Netherlands and Denmark, at the epicentre of concerns is Latvia, long seen as the financial nod between Russian money, Europe and the United States.