Banco Santander Fined €5.6 Million in European Anti-Money Laundering Scandal

News / Santander Fined €5.6M in Money Laundering Scandal

Europe finds itself once again at the center of a major anti-money laundering banking scandal. The Spanish Supreme Court, known as the Cassation, recently imposed a fine of €5.6 million on Banco Santander for its non-compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) rules. This decision came after the bank's failure to adhere to the AMLD sanctions profiles and the 40 recommendations set by the Financial Action Task Force (FATF).

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In 2013, following several reports, the anti-money laundering service Sepblac (Servicio Ejecutivo de la Comisión de Prevención del Blanqueo de Capitales e Infracciones Monetarias de España), which acts as the Financial Intelligence Authority (FIU) in Spain, intervened. Through a series of searches and internal investigations, Sepblac uncovered 143 high-risk accounts where appropriate AML/CFT checks had not been conducted as required by the existing regulations. As a result of these severe violations of international AML/CFT recommendations, Sepblac initially imposed a penalty of €10.5 million.

Legal Proceedings and Violations

The initial penalty was later reduced to six violations of the AML/KYC/CFT systems. However, during the court sessions between Banco Santander's legal department and the State Attorney's Office, four of the six violations identified by Sepblac were rejected. Eventually, only three violations were confirmed by the Court of Cassation, resulting in the final fine of €5.6 million.

The violations detected by Sepblac were related to a lack of or insufficient identification of the actual account holders, including failure to obtain information on the purpose and nature of the business relationship, violation of the obligation to identify the real holder, and failure to communicate necessary information. These procedures, checks, and modalities are not only obligatory, especially when high-risk indicators are present, but also regulatory requirements as stipulated by legislative acts such as "Ley 10/2010" and AMLD 4 and 5.

Banco Santander's Response

Banco Santander, in an official statement issued after the Supreme Court ruling, reaffirmed its commitment to detecting and preventing financial crime and money laundering. The bank stated that it diligently adheres to its regulatory obligation to report suspicious activity to the authorities and is committed to rectifying any shortcomings identified by the regulatory bodies.

Insufficient Anti-Money Laundering Measures

The recent warning from the European Court of Auditors highlights the inadequacy of current anti-money laundering measures within the banking sector. Examining the international landscape of banking scandals over the past decade, it appears that banks are willing to take risks, incur penalties, and pay fines, as they often believe that the profits outweigh the damages.

Lengthy Legal Proceedings and Profitability

Banks are often willing to enter into negotiations with governments or pursue court appeals, knowing that legal proceedings can be lengthy and that there is a high likelihood of reduced penalties or costs. Recent financial reports from several banks have revealed significant profit figures, despite the challenging economic period caused by the COVID-19 pandemic. Banco Santander, for instance, reported a profit of 23 billion in the first half of the year, attributed to factors such as digitalization, investments, cost reductions, and growth in European and national GDP. When comparing a penalty of 5.6 million over eight years to a six-month profit of 23 billion, it becomes evident that the potential gains outweigh the consequences for banks.

Lastly, it is worth noting the reputational damage experienced by Sepblac as a highly respected Financial Intelligence Authority, both nationally and internationally. Sepblac plays a significant role in combating money laundering and terrorist financing.


The recent anti-money laundering banking scandal involving Banco Santander highlights the ongoing challenges faced by the European banking sector in ensuring compliance with AML/CFT regulations. The fine imposed by the Spanish Supreme Court signifies the severity of the violations committed by the bank. However, the lengthy legal proceedings and potential profitability for banks raise concerns about the effectiveness of current enforcement measures.

The European Court of Auditors has already highlighted the insufficiency of anti-money laundering measures within the banking sector, indicating a need for stricter regulations and stronger enforcement. It is crucial for banks to prioritize robust AML/CFT procedures and ensure the identification of clients and compliance with reporting obligations.

Addressing these issues is vital not only to protect the integrity of the financial system but also to maintain public trust in the banking industry. Authorities must continue to enhance regulatory frameworks, promote international cooperation, and impose appropriate penalties to deter financial institutions from engaging in illegal activities. Only through comprehensive and effective measures can the fight against money laundering and terrorist financing be strengthened.

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