ING passed on suspicious-looking transactions from a wealthy Russian. A Polish ING subsidiary cooperated, knowingly or unknowingly, in potentially large-scale money laundering practices, Trouw revealed this week. What are the consequences for ING? Four questions, four answers.
Yes, for now in two areas. First of all, the company has lost value. After Trouw, Het Financieele Dagblad and research platform Investico revealed the affairs on Monday, ING’s share lost nine percent of its value. Admittedly, that day the ING share was not the only fall: it was such a fear of corona stock market day and there have been more times since mid-March. But ING’s stock fell further than others and the loss was not recouped in the days that followed.
Then there is reputation damage. ING reached a settlement with the Public Prosecution Service for 775 million euros in September 2018 after it was proven that the bank had done far too little to prevent fraud and money laundering – thus avoiding criminal prosecution. Since then, ING has taken its approach to money laundering more seriously and a few thousand people have been appointed to screen customers and their transactions.
Then it is painful when it turns out that even more went wrong in the past, in the period 2014-2018 and possibly afterwards; that ING was passing suspicious transactions of a well-known Russian oligarch and football club owner, Roman Abramovich; that ING Slaski arranged securities transactions for parties that were part of a large money laundering network and that the Polish ING subsidiary thus cooperated, knowingly or unknowingly, in possible large-scale money laundering. It is also painful that the ING head office in the Bijlmermeer in Amsterdam apparently thinks differently about the importance of customer checks and the screening of transactions than at the ING Slaski head office in Katowice. Does ING have its subsidiaries under control? Or do Polish privacy laws get in the way of ING – and money launderers don’t?
The issues are also annoying for ING staff. It is never nice when your employer is discredited and it is not the first time for ING. As an INGer, come to parties where ING is the topic of discussion. The staff members have one piece of luck: there are no big parties in Corona time.
The chance that customers will say hello to ING en masse is not great. Bank customers do not run away quickly. It is possible that supervisors in various countries will keep an extra eye on the bank. That ING must then get rid of customers. If American regulators start to stir, there is certainly reason for nail-biting in the Bijlmermeer. When US regulators find that US laws and regulations have been violated, the fines tend to be sky-high.
Those regulators could consider, for example, apparently two attempts by ING to transfer 45 million euros to a Russian company that the US had just blacklisted because of Russian interference in De Krim. But ING reported on Wednesday that there was an “administrative error” at the time (2014) and that the bank discussed the matter with the US authorities at the time. Why the bank did not report this to Trouw earlier, the bank did not report.
Not much. We must not go into individual cases, is the credo. The bank does emphasize that these are all things from the past (which is also the case, logically) and that the bank has improved its life. Globally, the bank now employs 4,000 people who are involved in auditing customers and transactions.
No. More banks appear in the reports of suspicious transactions that were once received by the American financial intelligence service FinCen and that have come into the hands of 109 media, including Trouw and Het Financieele Dagblad: the British banks Barclays and HSBC, for example, and the American JP Morgan. They too did not (again) take a close look at the controls on customers and transactions, giving the impression that doing business and earning from wealthy customers is more important than thorough customer controls. The question that has not yet been answered after the revelations: would it still be the case? And the next: will banks now (further) clean up their customer base, or will new disclosures be necessary?
Also read:
Two Dutch companies are at the heart of the diversion of billions from Russia
Two Dutch securities dealers play a leading role in American investigation into the illegal diversion of billions of dollars from Russia.
Abramovich made billions in suspicious payments through ING
As a customer at ING, oligarch Abramovich was able to transfer huge amounts of money that were suspicious according to another bank.
Even after heavy fines, banks continued to do business with malicious customers
Hard learners, that is how you could summarize the attitude of major banks worldwide, after the publications from the FinCen files.
