In the midst of the crackdown on money laundering, ABN Amro faces intense scrutiny and investigation over failure to combat risks of financial fraud, money laundering and other dubious financial practices by some of its clients. According to reports, the bank is still struggling with money laundering prevention, despite seeing the dire consequences faced by counterpart ING, which was fined up to 775 million euros in settlement fees in 2018 for serious negligence in combating money laundering. A court in The Hague also ruled that former ING CEO Ralph Hamers should be prosecuted for failing to supervise money laundering activities involving the bank’s clients.
The Public Prosecution Service (Openbaar Ministerie; OM), the body of public prosecutors in the Dutch criminal justice system, opened its investigation into the bank back in 2019, suspecting that ABN Amro made insufficient checks on transactions by its clients, and thus fell short in its obligations to combat money laundering. However, prosecutors from the OM have since added more serious charges, alleging that the bank may have known that illegal money flows, which had criminal sources, were occurring under its watch but did little about it. Suspects include former bank board members and former ABN Amro CEO Gerrit Zalm, all of whom currently face prosecution, according to business and financial newspaper FD. The overall focus of the investigation into ABN Amro is on the period between 2013 and 2018, during which Gerrit Zalm led the bank.
If found guilty of these serious charges, the accused could face up to two years in prison, or a fine of up to 87,000 euros. However, in order to successfully prosecute them, the prosecutors must first be able to demonstrate that they must have reasonably suspected that money flows originated from criminal sources, as stipulated in the Dutch Criminal Code.
Originally, the investigation by the Public Prosecution Service focused on the question whether or not ABN Amro had violated the Money Laundering and Terrorist Financing Prevention Act (Wwft), which was passed in 2017. This law contains provisions regarding customer screening, the identification and verification of customers, and the reporting of unusual transactions, with the overall objective of maintaining integrity in the financial system and prevent financial crimes.
Recently, ABN Amro allegedly either failed to report numerous unusual payments from its five million private customers, or failed to report such transactions on time. It was also leaked that the judicial authorities linked ABN Amro to the payment of bribes by Brazilian construction company Odebrecht. Based on sources from insiders, Odebrecht is said to have paid more than 100 million euros in bribes to South American politicians and civil servants via Dutch companies with ABN Amro accounts, according to De Telegraaf newspaper. Another high-profile case that came up in the ABN Amro investigation is the FloraHolland scam, where an employee of the Royal FloraHolland company was arrested for suspected embezzlement of 4.3 million euros over a nine-month period – money which was funneled through an ABN Amro account. The common characteristic of the abovementioned criminal cases involving dubious financial transactions is that they were noticed and reported by other parties, like tax authorities, but not by ABN Amro.
These allegations have been made despite the fact that the bank had allocated some 114 million euros to get its anti-money laundering checks in order, following earlier scrutiny and warnings by De Nederlandsche Bank (DNB), the Central Bank of the Netherlands.
Prosecutors are said to be close to a settlement with ABN Amro over the allegations of failing to report and/or investigate suspicious financial activity by its clients, according to FD, which cited sources close to the investigation. Even though ABN Amro has not yet agreed to a settlement, analysts expect the investigation to lead to a large payout, with a fine to the tune of hundreds of millions of euros. ABN Amro has previously stated that, while it would not comment on any details of the investigation, it is cooperating with the investigation.
Written by Seringe S.T.Touray