Rabobank, the second largest bank in the Netherlands, is being investigated by the Dutch Public Prosecution Service for potential violations of the country’s anti-money laundering/countering the financing of terrorism (AML/CFT) law.
The bank is “fully cooperating” with the probe, it said in a press release Wednesday. Rabobank said it could not provide any further information on the matter.
Rabobank’s alleged AML/CFT shortcomings date back to at least September 2018, when the Dutch Central Bank (DNB) ordered Rabobank to improve its customer due diligence practices.
In April 2020, the DNB launched an investigation of the bank and concluded it didn’t meet certain requirements related to know your customer (KYC) activities. In February 2021, the DNB fined Rabobank 500,000 euros (then-U.S. $565,000).
In October 2021, the DNB warned Rabobank to fix deficiencies in its compliance with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act. Rabobank needed to step up its efforts regarding customer due diligence, transaction monitoring, and reporting of unusual transactions, the DNB said.
The DNB warned Rabobank it intended to begin a punitive enforcement procedure.
Earlier this year, Rabobank disclosed plans to spend €249 million (U.S. $263 million) to enhance its KYC program.
Separately, the European Commission on Tuesday flagged Rabobank, along with Deutsche Bank, for possibly breaching EU antitrust rules by “colluding to distort competition” between 2005 and 2016 when trading government guaranteed bonds. If the European Commission’s preliminary review is confirmed, the banks would be in violation of EU anticompetition rules, the governing body said.
Traders at the banks exchanged commercially sensitive information and coordinated their pricing and trading strategies via emails and in online chat rooms, the European Commission said.
In February 2018, Rabobank’s U.S. subsidiary, Rabobank National Association, pleaded guilty to violating the U.S. Bank Secrecy Act and AML rules for “allowing illicit funds to be processed through the bank” without adequate review. The Department of Justice ordered the bank to forfeit nearly $369 million.