ING Bank fails with AML checks of funds and associations

In recent decades, the rule of KYC (Know your customer - Know your customer), compliance and financial monitoring (AML / CFT - Anti-Money Laundering / Combating the Financing of Terrorism) have become mandatory components of banking. In the Netherlands, banks that do not pay due attention to these activities are subject to multi-million dollar fines by regulatory authorities.

ING Bank was already fined 2018 million euros in 775. The institution now acknowledges its inability to properly vet funds and associations that apply to open an account. Therefore, temporarily accounts simply will not be opened.

prehistory

All major banks in the Netherlands were accused of improper customer due diligence to prevent financial and economic crimes.

Between 2010 and 2016, clients abused their ING account to launder hundreds of millions of euros, according to prosecutors. The investigation into ING began in 2016. One of the most high-profile cases was the case of the telecommunications company VimpelCom, which paid bribes worth millions of dollars to the daughter of the president of Uzbekistan through accounts in ING.

As a result, ING Bank reached a settlement agreement with the prosecutor's office in the amount of 775 million euros. The amount of the settlement consisted of a fine (675 million euros) and a payment to the state (100 million euros). The $100 million is the amount prosecutors said ING "saved" on staff who were supposed to verify customer transactions. Since then, the bank has devoted more time and money to verifying customers, but now the resources are exhausted.

The threat of a fine from the supervisory authority did not bypass Rabobank either. After receiving a warning from De Nederlandsche Bank, the state regulator, Rabobank allocated 249 million euros to improve AML control.

Now what?

ING Bank is too busy with AML verification of new and existing clients, so foundations and associations can no longer apply for a bank account. ING expects foundations and associations to be able to open a bank account again sometime in the first three months of 2023.

The bank currently does not have enough staff to conduct due diligence on clients for these "complex legal forms". The bank has to figure out many things, such as what is the purpose of the account, who are the ultimate stakeholders. These are questions that are not always immediately clear in these legal forms.

“ING is currently under-resourced to carefully process new applications from foundations and associations, as well as related customer due diligence.bank representatives say. — In recent years, customer verification and transaction monitoring have been very active. This is partly due to laws and regulations, but also to the fact that criminals are becoming more and more inventive.. The bank has more than 4000 full-time employees to track transactions and verify customers, but resources are still lacking.

Due to the high costs, associations and foundations will also pay more for client reviews. Now it costs 3 euros per month, and from September it will be 7,50 euros per month. Private companies, cooperatives and church associations, among others, already pay 7,50 euros per month. Individual entrepreneurs and partnerships do not pay for customer verification.