Private Bank Edmond de Rothschild fined by Luxembourg watchdogs

The Luxembourg Financial Sector Supervisory Commission (CSSF) have fined the local arm of Swiss private bank Edmond de Rothschild for its handling of funds linked to scandal-hit Malaysian investment fund 1MDB, a source familiar with the matter said on Thursday.

The CSSF communicated the conclusion of the administrative procedure to Edmond de Rothschild (Europe) on 21 June," the private bank said on Thursday. 

The private bank takes note of the decision and "will pay a penalty of €8,985,000, marking the end of this procedure in which it has actively participated", said in a statement.

In its statement this Thursday, the Swiss bank said compliance with legal and regulatory requirements for its subsidiaries, as well as its "collaborators", was a "major priority".

Paying the fine "marks the end of the proceeding in which it has actively participated", the bank said in a statement, noting the Luxembourg arm had taken measures since the first half of 2016 to strengthen its compliance and risk control procedures.

Swiss watchdog FINMA also announced on Thursday that they were conducting enforcement proceedings against the private bank to establish whether it had abided by its anti-money-laundering standards, Reuters reports. 

"We know of the case and are in contact with CSSF. We cannot comment on the context of the case," a FINMA spokesman said in a statement. 

Rothschild is the latest Swiss bank to be swept up in the 1MDB case, which has triggered money-laundering investigations in at least six countries including Switzerland, Singapore and the United States. Malaysian Prime Minister Najib Razak, who chaired 1MDB's advisory board, has denied any wrongdoing.

As part of an extensive review into 1MDB-related transactions, Singapore has shut down the local units of Switzerland's BSI Bank and Falcon Bank due to failures of money laundering controls and improper conduct by senior management, frozen millions of dollars and charged several private bankers.

The review uncovered a complex web of transactions involving shell companies and individuals operating in many jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.

Singapore's central bank last month fined Credit Suisse and United Overseas Bank (UOB) a total of S$1.6 million ($1.15 million) for breaching anti-money laundering rules in transactions related to 1MDB.

Last year, it fined DBS, UBS, Standard Chartered and private bank Coutts for breaches of Singapore's anti-money laundering laws in connection to 1MDB transactions.

Swiss agency FINMA has already reprimanded Credit Suisse and UBS for dealings surrounding 1MDB.