Tuesday 4 September 2018 9:03 am

ING ordered to pay £700m to settle money laundering case

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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Dutch bank ING has been ordered to pay €775m (£698.15m) to settle a money laundering case.

The bank failed to carry out due diligence and allowed the "structural infringement" of the Netherlands' Money Laundering and Terrorist Financing Act between 2010 and 2016, according to the prosecution.

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"The result is that clients have been able to use ING NL's accounts for criminal activities almost undisturbed for years," the Dutch Public Prosecution Service said.

"ING NL should have seen that certain cash flows that flowed through the bank accounts of ING NL's clients may have originated from crime.

"The bank has wrongly not taken sufficient action on this."

ING will pay a fine of €675m and pay back €100m of funds received through illegal or unethical transactions. 

Along with the criminal investigation, ING carried out an internal inquiry that established failures such as missing or incomplete due diligence files, assignment of incorrect risk classifications and the lack of a periodic review process. 

Other shortcomings included the failure to exit business relationships at the correct time, insufficient functioning of the post-transaction monitoring system, classifying clients in the wrong segments and insufficient human resources. 

ING has taken measures against former senior employees that were responsible for preventing financial economic crime and carrying out customer due diligence policies, by withholding remuneration and suspending duties. 

It said the failures aren't attributable to individuals, however, but "collective shortcomings" in management.

Executive board members will not receive bonuses this year.

ING chief executive Ralph Hamers said: “As a bank we have the obligation to ensure that our operations meet the highest standards, especially where it comes to preventing criminals from misusing the financial system.

"Not meeting those standards is unacceptable and ING takes full responsibility."

“We take this very seriously," added ING Netherlands chief executive Vincent van den Boogert. "We are taking a number of robust measures to strengthen our compliance risk management and support a strong risk culture and will be making further improvements to ensure we can play a full role in contributing to protecting the integrity of the financial system.”

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