Germany’s financial regulator, BaFin, has imposed a record fine of 45 million euros ($51.8 million) on JPMorgan Chase for failing to adequately combat money laundering. The US banking giant was found to have “systematically failed to submit suspicious activity reports related to money laundering in a timely manner” between October 2021 and September 2022. This breach of supervisory duty led to the fine, which is the highest ever imposed by BaFin, calculated based on the bank’s turnover.
Financial institutions are required to submit suspicious activity reports when they detect potentially illegal activity in a customer’s account. JPMorgan Chase’s failure to do so in a timely manner has resulted in the significant fine, exceeding the 39-million-euro penalty imposed on Deutsche Bank in 2015 for the same reason.
A spokesperson for JPMorgan Chase stated that the fine “relates to historical findings and the timing of our (suspicious activity report) filings did not impede any investigations by the authorities.” The bank emphasized its commitment to detecting, preventing, and reporting money laundering and financial crimes, and is pleased that the matter is now resolved and remediated.
This development comes as JPMorgan Chase prepares to launch its online bank, Chase, in the German market in 2026, following its launch in the United Kingdom in 2021. The bank will face strong competition in Germany from established players such as N26, Revolut, and Trade Republic.
The fine serves as a reminder of the importance of robust anti-money laundering measures in the financial sector. BaFin has been actively enforcing regulations, as evident from the recent 23-million-euro fine imposed on Deutsche Bank for violations in the sale of derivative products and operational shortcomings.
As the largest bank in the United States in terms of assets, JPMorgan Chase’s presence in Germany is significant. The bank’s commitment to resolving and remediating the issue is crucial in maintaining its reputation and complying with regulatory requirements. The record fine imposed by BaFin underscores the need for financial institutions to prioritize anti-money laundering efforts and adhere to regulatory guidelines to prevent similar breaches in the future.