Focus on high-risk clients in the context of combating money laundering (2024)

In order for anti-money laundering processes to be effective and efficient, it is necessary for the boards of directors of financial intermediaries to establish a clearly defined risk tolerance ("tone from the top"). That also includes clear communications regarding particularly high-risk clients, high-risk countries and services that are deemed outside the risk tolerance limits. It must be generally ensured that the tolerated risks can be effectively monitored and contained at all times. In this respect, one key instrument is the money laundering risk analysis that is available to the strategic governing bodies of banks and other financial intermediaries. It enables money laundering risks to be identified and contained, while also serving as a basis for defining risk criteria of relevance to the financial institution's activity.

Risky clients such as officers or officials of state or quasi-state companies established in high-risk countries carry particularly high money laundering, legal and reputational risks. That is particularly true in the case of countries subject to internationally agreed sanctions regimes. In cases where large assets are being accumulated, it is possible that money-laundering related offences, such as embezzlement, bribery or fraud, are being committed in those countries. The clarification requirements that financial intermediaries must fulfil in relation to clients from these countries are accordingly high. Special care must be taken when entering into and continuing business relationships of this nature. This also applies if such persons are not formally subject to sanctions.

In the first instance, the origin of the client's assets must be clarified in detail, and it must be verified that the assets originate from legal sources. Furthermore, higher-risk transactions must be monitored very carefully. In this respect, scenarios in which wealth management banks provide financial services to the operating companies of their high-risk private clients are problematic if they lack the specialist expertise necessary to provide the services in question.

(From the Annual Report 2024)