In the special inspection conducted in 2022 and in the annual audits for 2022 and 2023, Varengold Bank AG was found to have serious shortcomings in the prevention of money laundering, in particular in the execution of transactions relating to Iran. BaFin found shortcomings for example in connection with the following statutory obligations: risk analysis, creation and operation of an IT monitoring system, performance of customer due diligence and compliance with obligations in the implementation of internal safeguards. The serious shortcomings have a considerable impact on the institution’s prevention of money laundering and terrorist financing.

On 25 July 2025, BaFin therefore ordered the institution to remedy the shortcomings. The administrative order is final and binding.

Varengold Bank AG has submitted a written remediation plan to BaFin and must report to BaFin on an ongoing basis regarding the status of the remediation of the shortcomings.

Furthermore, in an administrative fine order of 22 August 2025, BaFin imposed an administrative fine amounting to EUR 3.3 million on Varengold Bank AG. From June 2023 to March 2025, the institution had systematically failed to submit suspicious transaction reports within the prescribed period. The administrative fine order is final and binding.

Moreover, in an administrative order issued on 26 February 2025, BaFin imposed a coercive fine in the amount of EUR 500,000 on Varengold Bank AG due to two violations of the administrative order of 27 June 2023. In this administrative order, Varengold Bank AG had been prohibited from executing transactions with payment agents and other third parties relating to Iran, due to high money laundering risks and serious shortcomings in the prevention of money laundering.

The administrative order imposing the coercive fine is final and binding.

Background information:

Prevention of money laundering and terrorist financing

Companies in the financial sector are required to prevent money laundering and terrorist financing. Such criminal activities may not only threaten the reputation and solvency of individual financial institutions, but may also endanger the integrity and stability of the financial system as a whole.

The obligations that companies must meet to prevent money laundering and terrorist financing are set out in the German Money Laundering Act (Geldwäschegesetz – GwG). Under the GwG, companies are required for example to ensure transparency in their business relationships and financial transactions. They must also implement an effective risk management system, which also comprises the risk analysis (section 5 of the GwG) and internal safeguards (section 6 of the GwG).

Under section 6 (1) of the GwG, credit institutions are required to implement internal safeguards in the form of principles, procedures and controls in order to manage and mitigate the risks of money laundering and terrorist financing. Credit institutions must do this to prevent their services from being misused to channel profits from criminal offences into the legal money cycle. They are required to monitor the functionality of their internal safeguards and update them where necessary.

BaFin can take action should it conclude that there are shortcomings in an institution’s business organisation with regard to the prevention of money laundering, terrorist financing and other criminal offences. For example, BaFin can issue an order requiring the institution to remedy the respective shortcomings. This is what BaFin has done in the case of Varengold Bank AG. The basis for such action is section 51 (2) sentences 1 and 2 of the GwG. Furthermore, BaFin has imposed reporting obligations for monitoring the remediation of the shortcomings in accordance with section 44 (1) of the German Banking Act (Kreditwesengesetz – KWG).
In accordance with section 14 of the German Act on Administrative Enforcement (Verwaltungsvollstreckungsgesetz – VwVG) in conjunction with section 17 (1) of the German Act Establishing the Federal Financial Supervisory Authority (Gesetz über die Bundesanstalt für Finanzdienstleistungsaufsicht – FinDAG), BaFin may enforce the orders it issues within the scope of its statutory powers by taking enforcement measures. The prohibition of the execution of specific transactions was also based on section 51 (2) sentences 1 and 2 of the GwG.

BaFin is publishing this information on the basis of section 57 (1) of the GwG.

Suspicious transaction reporting

Under section 43 (1) of the GwG, institutions must submit a report to the German Financial Intelligence Unit (FIU) if they suspect that a business transaction or other transaction might be related to money laundering or terrorist financing.

Such suspicious transaction reports must be submitted without delay. This allows the FIU to promptly take further action if necessary, such as forwarding the information to law enforcement agencies.

BaFin may impose a fine if institutions fail to meet their obligations under section 43 (1) of the GwG or fail to do so within the prescribed period.