AML Failures? Rabobank Could Pay a Hefty Price

On Monday, November 15, Dutch cooperative Rabobank announced that it had been ordered by the Dutch central bank to fix its customer due diligence practices under threat of a “punitive enforcement procedure”. Rabobank went on to explain in the statement that the current scrutiny the bank is facing stems from Rabobank’s lack of compliance with Dutch anti-money-laundering laws.

Rabobank said in the company’s statement that, “These deficiencies mainly concern the execution, recording and outsourcing of client due diligence, transaction monitoring and reporting of unusual transactions.” As of right now, Rabobank claims to be unaware as to whether prosecutors are investigating the situation and unaware of whether or not fines will be imposed upon the bank.

If past examples of Dutch banks failing to meet anti-money-laundering compliance requirements are any indication, though, Rabobank could be facing hefty penalties. In April 2021, the Dutch bank ABN Amro was forced to pay over 480 million Euros in fines after the bank was accused by public prosecutors of failing to sufficiently monitor customer transactions. In September 2018, the Dutch bank ING Groep paid out a 775 million euro settlement after admitting that criminals had been able to successfully launder money through its accounts.

If Rabobank hopes to avoid becoming the next Dutch bank forced to pay out a settlement due to anti-money-laundering noncompliance, it is essential for the bank to thoroughly address its customer due diligence practices as ordered by the Dutch central bank.  According to Rabobank Chairman Wiebe Draijer, this is something that the bank is actively working to do.

“We view the role of gatekeeper to the financial system as our commitment and joint responsibility to society,” Rabobank Chairman Wiebe Draijer said in a statement “We remain dedicated to, and continue to invest in our KYC (know your customer) program.”