The Austrian Financial Market Authority (FMA) has imposed a record fine of €2.07 million on Raiffeisen Bank International (RBI) for breaches of anti-money laundering regulations.

The penalty, announced on 28 June 2024, marks the largest ever imposed by Austrian regulators.

According to the FMA, RBI failed to demonstrate adequate checks for the prevention of money laundering and terrorist financing in two of its correspondent banking relationships with institutions in third countries. Sources close to the matter indicate that the banks in question are based in Cuba and Bahrain, though this information has not been officially confirmed.

The fine comes amidst growing scrutiny of RBI's international operations, particularly its continued presence in Russia following the invasion of Ukraine. The bank has faced pressure from Western regulators, including a recent warning from the US Treasury Department that its access to the American financial system could be restricted due to its Russian business activities.

RBI, which remains the largest Western bank operating in Russia, has announced plans to spin off its Russian operations but has yet to follow through. The bank maintains that it has proper anti-money laundering controls in place and intends to challenge the FMA's decision in court, stating that the allegations are "unfounded".

This latest development adds to the challenges facing RBI, as it navigates complex international regulations and geopolitical pressures. The situation highlights the broader tensions between Western financial institutions and their historical ties to Russia, with Austria's position as a hub for financial flows from Russia and former Soviet states coming under increased scrutiny.

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