In a massive revelation, the Deutsche Bank reportedly allowed suspicious transactions worth $1.3 trillion in the period between 1999 and 2017 that have been flagged by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

German broadcaster Deutsche Welle (DW) released an eye-popping report of suspicious transactions by global banking institutions. The report mentioned Germany’s largest lender Deutsche Bank to have facilitated more $1 trillion in suspicious transactions to the U.S. government in over two decades.

Also, the leaked documents show that Deutsche Bank processed $1.3 trillion of the total $2 trillion in suspicious transactions. The notorious document of the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) notes that Deutsche Bank was also aware of these operations. It means that this was a complete breach of the regulatory process by the German banking giant. By law, financial firms have to alert regulators on detecting any suspicious activities.

BuzzFeed was the first to get its hands on the files. It later shared these papers with the International Consortium of Investigative Journalists (ICIJ). The revealed documents show that Deutsche Bank alone contributed 62% of all Suspicious Activities Reports (SARs) filed with the FinCEN.

This itself challenges the regulators and financial institutions responsible for stopping the flow of dirty money in the global economy. The Deutsche Bank has responded to this news in a post on its website, the German Bank wrote:

“The documents have already been investigated and led to regulatory resolutions in which the bank’s cooperation and remediation was publicly recognized. Where necessary and appropriate, consequence management was applied.” The banking giant further added that it has “devoted significant resources to strengthening our controls” and “are very focused on meeting our responsibilities and obligations.”

The probe from New York and the U.S. regulators also shows that between 1999 and 2006, the German bank moved 9.2 billion Euros ” on behalf of Iranian, Libyan, Syrian, Burmese and Sudanese financial institutions”.

Asian and European Markets Under Pressure

Apart from Deutsche Bank, the leaked documents also mention names on banking giants like HSBC and Standard Chartered. Shares of both these Hong-Kong-listed banks have tumbled during Monday’s trading hours. HSBC collapsed 3.23% while Standard Chartered drop 2.96%.

In a statement given to CNBC, HSBC said:

“We do not comment on suspicious activity reporting. Since 2012, HSBC has embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions.”

Standard Chartered also responded to the latest developments saying:

“The reality is that there will always be attempts to launder money and evade sanctions; the responsibility of banks is to build effective screening and monitoring programmes to protect the global financial system. We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programmes”.

Along with the Asian markets, the European markets are also under pressure in the pre-trading hours.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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