Deutsche Bank is conducting an internal investigation into whether about $6bn of trades by Russian clients breached anti-money laundering rules.
Germany’s biggest lender was asked last year by the Bank of Russia, the country’s central bank, about the trades of some of Deutsche’s Russian clients. The internal probe is looking at trades carried out over a period of four years ending in early 2015.
Deutsche, which is one of the biggest foreign banks in Russia, said it was “committed to participating in international efforts to detect and combat suspicious activities and we take strong action where we find evidence of misconduct”.
The bank added that it had placed “a small number of individuals” from its Moscow unit on leave, pending the results of its internal review. The suspensions occurred earlier this year.
People familiar with Deutsche’s equities business in Russia said the department’s head Tim Wiswell had been put on leave over the issue. Mr Wiswell could not be reached for comment.
The German financial watchdog, BaFin, as well as the UK’s Financial Conduct Authority and the European Central Bank declined to comment on the news, first reported by Bloomberg. The Bank of Russia did not immediately respond to requests for comment.
A banking regulation official in Moscow said there had been “communication” with Deutsche at the end of last year, but this did not constitute a Russian government probe.
The trades in question involve securities bought in roubles through Deutsche in Moscow by Russian clients, at the same time the bank bought the same securities in western currencies from various entities through its London business.
Russian companies and wealthy individuals have long kept money and registered assets offshore to protect them from expropriation attempts by the state and hide them from the tax authorities. As a result of a multiyear effort to force some of those assets onshore, Moscow made a series of legal changes last year nicknamed de-offshorisation.
Under the new rules, part of which took effect this year, Russian tax residents must inform the authorities of interests in foreign-registered entities, and will start to be taxed on the income of Controlled Foreign Corporations if it exceeds certain limits.
Russia’s parliament is also expected to pass legal changes this year that would make it a criminal offence to evade taxes through the use of CFCs. Lawyers and accountants said the legal changes had triggered increased attempts by Russian citizens to clandestinely move funds offshore.
Shares in Deutsche closed down 1.7 per cent at €27.62 in Frankfurt.
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