Deutsche Warns Clients of Cutoff -- WSJ
June 12 2019 - 3:02AM
Dow Jones News
By Jenny Strasburg
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 12, 2019).
Deutsche Bank AG has given around 1,000 investment-banking
clients a month or less to hand over company-ownership information
and other documentation in the bank's protracted effort to close
compliance gaps, according to the bank and people familiar with the
demands.
The "know your customer," or KYC, letters have gone to asset
managers and corporate clients in recent weeks as part of an
continuing, multiyear effort, some of the people said.
The clients have been told to provide the information by the end
of June or face the risk of getting cut off from new loans and
other services, one of the people said.
"This is a standardized notification that has been sent to
thousands of clients globally," a Deutsche Bank spokeswoman said.
The latest wave of letters, earlier reported by the Financial
Times, pertains to certain products and requirements by the bank to
screen transactions to prevent money laundering and other financial
crimes by clients, the bank said.
The German lender's anticrime teams, along with managers inside
the investment bank and other businesses, over the past several
years have been going through thousands of customer accounts to
identify high-risk clients and complete know-your-customer
paperwork, some of it deficient, people inside and outside the bank
say.
The latest client letters are focused on the global transaction
bank, a person familiar with the communications said. That unit,
which is part of the investment bank, lends money to companies to
finance their global trade flows and processes international cash
transfers for banks, other corporations and governments.
The business is a focus of investment by Deutsche Bank as it
seeks to improve profits and shed unprofitable operations.
Deutsche Bank has suffered repeated lapses in fighting such
crime, including failures in its money-laundering controls, leading
to costly settlements with regulators, new investigations and
congressional scrutiny.
During a multiyear process of reviewing around 20,000 clients,
the bank has severed relationships with an undisclosed number of
clients and countries deemed possible conduits for money laundering
and terrorism financing, according to people inside the bank and
its regulators.
Still, new investigations into past transactions keep adding to
Deutsche Bank's regulatory headaches. As recently as last year,
German regulators have found the bank missing documentation in
rudimentary checks to police its compliance measures, resulting in
public rebukes and government-approved monitoring.
(END) Dow Jones Newswires
June 12, 2019 02:47 ET (06:47 GMT)
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