Dutch UBS chief faces prosecution over money laundering at ING

A Dutch court on Wednesday, December 9, ordered the prosecution of the head of Swiss banking giant UBS, Ralph Hamers, over money laundering when he was chief executive officer of the Dutch lender ING.

Hamers led ING when it settled a 775-million-euro ($940-million) laundering probe with Dutch authorities in 2018 after it failed to ensure that people were not hiding cash used for illegal purposes in its accounts.

The Dutchman, 53, joined UBS in September, with the Swiss bank describing him as the “right CEO to lead our business into its next chapter” having steered ING through the 2008 financial crisis.

The Hague court of appeal said in a statement that it was “of the opinion that there are sufficient leads for a successful prosecution of this former director as the de facto supervisor of the criminal offenses committed by ING.”

“The facts are serious, no settlement has been reached with the director himself, nor has he taken public responsibility for his actions,” it added.

UBS said it had “full confidence” in Hamers to lead the bank.

“UBS takes note of the decision of the Dutch courts to order the public prosecutor to open an investigation of Ralph Hamers, in his capacity as the former CEO of ING, relating to ING’s anti-money laundering compliance,” it said in a statement.

“UBS has full confidence in Ralph Hamers’ ability to lead UBS.”

‘Serious prohibited behavior’

Hamers, who joined ING in 1991, won plaudits for leading ING out of the financial crisis, reimbursing a huge Dutch state bailout months ahead of schedule. 

But his time at the bank was also dogged by controversy.

The amount that ING paid in 2018 included a 675-million-euro fine and a reimbursement of 100 million euros which ING underspent on staffing to prevent the crimes as well as carry out due diligence procedures.

Dutch prosecutors at the time detailed several examples of misused accounts that ING failed to crack down on, saying that customers had laundered hundreds of millions of euros between 2010 and 2016.

These included an international telecommunications provider that allegedly transferred bribes worth millions of dollars via its bank accounts with ING to a company owned by the daughter of a former Uzbek president.

In another case, a women’s underwear trader laundered 150 million euros through a bank account held at ING. “It should have been clear to the bank that the monetary flows had little to do with the lingerie trade,” prosecutors said.

When ING’s monitoring system did generate alerts, they were never further investigated and described by the bank as “not unusual.”

Hamers said at the time that the bank “takes full responsiblity” and that it was a “bad day for ING.”

However later that year the bank also had to drop plans to give him a massive pay hike, after a public outcry and criticism from Dutch Prime Minister Mark Rutte.

The Hague appeals court said in its decision on Wednesday that it was “important in a public criminal trial…that directors of a bank do not go unpunished if they have actually directed serious prohibited behavior.

“Citizens must be able to see that such actions are not accepted by the government either,” it added. – Rappler.com