By Nadya Oppenheim
Published on
•Updated
Germany’s financial watchdog BaFin has fined JPMorgan €45 million after finding shortcomings in the US bank’s money laundering prevention systems.
The Frankfurt-based subsidiary of JPMorgan Chase & Co. failed to submit suspicious transaction reports on time between October 2021 and September 2022, BaFin said on Thursday.
The regulator said the bank “culpably breached its supervisory obligations” regarding internal processes for flagging potentially illicit activity, resulting in a failure to report such transactions “without undue delay”. The fine notice became final on 30 October, according to BaFin’s statement.
Under Germany’s Money Laundering Act, banks are required to report transactions that might be linked to money laundering or terrorist financing to the country’s Financial Intelligence Unit (FIU). Prompt reporting allows authorities to investigate and, if necessary, forward cases to law enforcement.
BaFin noted that, in cases of systematic breaches, penalties can be based on an institution’s total turnover — potentially leading to significant fines, as was the case for JPMorgan. The €45mn penalty is the largest ever imposed by BaFin on a financial institution. That follows a previous €40mn record fine levied on Deutsche Bank in 2015.
The decision comes as German authorities respond to ongoing challenges in anti-money-laundering controls, following a series of financial scandals. These include this week’s arrests of 18 individuals in an international investigation into online fraud and money laundering networks involving payment providers, as well as the collapse of German payments firm Wirecard in 2020.
A JPMorgan spokesperson told Euronews: “The fine relates to historical findings and the timing of our SAR filings did not impede any investigations by the authorities. We are deeply committed to detecting, preventing, and reporting money laundering and financial crimes, and are pleased that this matter is now resolved and remediated.”