Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), imposed the administrative penalty against the bank on Wednesday for failing to take proper anti-money laundering and counter terrorism financing precautions.
Neither CSSF nor Rothschild have commented on news reports that the case concerned 1MDB; however, sources close to events have confirmed to newswire Reuters that this is the case.
The regulator took into account changes to the bank’s management team and an overhaul of its internal governance structure in determining the financial penalty.
A new chief executive of Edmond de Rothschild (Europe) in Luxembourg was appointed as part of a management shake-up in 2016.
Swiss connection
Rothschild is not the only Swiss bank to be caught up in the Malaysian wealth fund’s troubles, with Falcon Bank, BSI Bank, Credit Suisse and UBS Group also hit.
The Monetary Authority of Singapore (Mas) fined Credit Suisse and Asian bank United Overseas Bank (UOB) and issued banning orders against three people in May after its two-year investigation in the 1MDB.
The Singapore regulator also shut down the local branches of BSI Bank and Falcon Bank in 2016.
In April 2017, Switzerland’s Financial Market Supervisory Authority (Finma) confirmed that four cases linked to 1MDB were unresolved. The only bank named was Zurich and Basel co-headquartered UBS Group.
The Swiss regulator also fined British bank Coutts & Co, which counts the Queen as one of its clients, for its role in the 1MDB scandal in February, with the Hong Kong regulator following suit two months later.
