Compliance

Prosecutors Drop Allegations Vs Deutsche Bank Over Tax Evasion Claims

Tom Burroughes, Group Editor, London, 9 December 2019

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The bank has, however, been fined for shortcomings in its control environment. The ruling in general will be a relief for a bank that has had more than its fair share of challenges in recent years. The story highlights how tax evasion and money laundering remain high on policymakers' agendas in certain countries.

Prosecutors in Germany have dropped allegations against Deutsche Bank and some of its staff of aiding and abetting tax evasion and money laundering via offshore entities set up by subsidiary group Regula.

However, the bank has accepted a €5.0 million fine and confiscation of avoided costs of €10 million for “shortcomings in its control environment”, it said in a statement today. 

“With the closure of these proceedings it is clear that the prosecutors have not found any instances of criminal misconduct on the part of Deutsche Bank employees following the raid of our Frankfurt office in November 2018. The investigation that has now been closed due to lack of sufficient suspicion had a heavy impact on Deutsche Bank last year,” Joerg Eigendorf, group spokesman of Deutsche Bank, said.

“It is true that the bank had weaknesses in its control environment in the past. We identified these weaknesses and we have addressed them in a disciplined manner,” he said. 

It was in connection with this investigation that – together with Federal Criminal Police officers – the Frankfurt public prosecutor’s office raided Deutsche Bank’s headquarters in Frankfurt and other business premises in and around Frankfurt on 29 November 2018.

A spokesman for the Frankfurt public prosecutor's office stated that they were able to close investigations earlier than originally anticipated thanks to the “excellent and close cooperation” with Deutsche Bank. The public prosecutor’s office also stated that it is still in talks with Deutsche Bank in connection with the investigation into Danske Bank and that these talks are constructive and well advanced.

Deutsche Bank has increased the number of employees in its Anti-Financial Crime unit by threefold, and has invested €700 million since 2016 in modernising its key controls.

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