Russia's CBR says more banks used Deutsche Bank "mirror trade" scam to send money abroad

Russia's CBR says more banks used Deutsche Bank
Russian regulator says mirror trading ruse continues among banks but at low level compared with RUB600bn in 2014. / Photo by Deutsche Bank
By bne IntelliNews June 27, 2017

The Central Bank of Russia (CBR) said on June 27 that Deutsche Bank was not the only international lender found to have conducted “mirror trades” to circumvent regulations and send money out of Russia in the last few years, according to Bloomberg.

The CBR didn’t name the other banks and said Deutsche Bank was the biggest offender. The regulator told Bloomberg that it had found about RUB750bn ($13.5bn at average exchange rates over the period) were sent abroad using the scheme from 2014 to 2016. Deutsche Bank’s internal investigation found about $10bn in trades through its Moscow office from 2011-2015.

Deutsche Bank agreed early this year to pay $630mn to the UK and US authorities in fines for lax anti-money laundering procedures. A US Department of Justice investigation remains open.

Deutsche Bank’s role in the mirror trading became public as a result of its internal probe, which the lender also shared with the regulator. Deutsche Bank paid a fine of just RUB300,000 ($4,200) to the CBR for violations found in the investigation.

The CBR says the mirror trade scam is still in use but it found only RUB800mn in such transactions in the first quarter of this year, down from RUB600bn in 2014 and RUB17bn in 2016. The CBR has nixed the licenses of over 100 brokers as part of the crackdown, reports Bloomberg.

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