Rothschild Europe Agrees to Pay €25M to Settle Luxembourg’s 1MDB Money Laundering Charges

The Swiss bank Edmond de Rothschild Europe has reached an agreement with Luxembourg prosecutors for its involvement in the 1MDB scandal.

The Bank has pleaded guilty to a criminal case that involved the misappropriation of Malaysian government funds and extensive money laundering.  

Rothschild Europe has now reached an agreement with the Public Prosecutor’s Office to avoid a full public criminal prosecution in exchange for a €25 million penalty. 

As per media reports, this penalty is the most severe legal fine ever faced by any European bank.

The famous Swiss bank was previously punished by Luxembourg’s anti-money laundering watchdogs in 2017 for its careless handling of funds linked with the infamous 1Malaysian investment firm 1MDB. 

It was eventually fined over €9 million by Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF).

When the $472.5 million connected to 1MDB moved through the bank, the bank failed to follow anti-money laundering protocols and did not conduct thorough due diligence. 

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Later, the bank’s operations were thoroughly investigated by Swiss authorities back in 2018. The Swiss Financial Market Supervisory Authority (FINMA), for instance, found out that Rothschild Bank AG and one of its branches had committed a major violation of money laundering regulations in relation to 1Malaysia Development Bhd.

The bank also neglected to properly record several high-risk transactions. It specifically breached the obligations for recordkeeping, reporting, and due diligence.

As a result, FINMA assigned an audit agent to examine the improvements that the institutions had already implemented.  

This brought an end to the final of seven enforcement actions that FINMA had started against 1MDB.

It took the bank a long time to submit suspicions of money laundering to the Money Laundering Reporting Office Switzerland (MROS).  

Additionally, the bank also neglected to properly record several high-risk transactions.

After denying the charges, Marc Ambroisien, the former head of the bank, was indicted in 2022. CSSF also banned him from working in the finance sector for ten years.

According to media sources, Rothschild Europe will now pay a €25 million penalty for criminal charges in relation to the 1MDB scandal.