Deutsche Bank Anti-Financial Crime Russian Laundromat Philippe Vollot, Hinrich Vélcker Financial Crime Investigations Audit Committee of the Supervisory Board, April 24, 2018 Gea.Russian Laundromat Recap: The Russian Laundromat Scheme Money Laundering from 2011 to 2014 with alleged DB involvement The Russian Laundromat is a vast money laundering scheme 5 that handled at least USD 20bn! over a four-year period Loan paid out nasiel via fictitious lending activities, involving multiple 7 Fictitious of Russia loan core shell companies Company A “Type heelioom gene bened¥alargeleum a ‘of money to UK-based company B a Ais -— 5 Company B Other businesses in Russia — fronted by Moldovans ~ ‘would then guarantee these “loans”. 2 aig Company B would fail to return the “money” Obligation for es ai a guarantor as Moldovan corrupt judges would authenticate the “debt”, ft eee allowing Russian companies to transfer real money from f accounts in Russia to Moldindconbank in the Republic of Court $20 BILLION yy Moldova order Loan From here, the money went to company A’s account = guarantee at Trasta Komercbanka in Latvia Ti ‘Therewith, the whitewashed money is inside the EU and could be transferred globally one ‘The UK shell companies! beneficial owners were hidden behind unknown offshore shareholders im" Moldovan court Loan © Russian guarantor % fails The OCCRP? uncovered the scheme and identified a involved stakeholders, e.g. Russian oligarchs Until publication of the inteligence on the OCCRP2 website in March 2017, Deutsche Bank was not aware of this, money laundering scheme [may be 9 high as USD 80 ° ‘Only with this intelligence received is it now possible & organizes Crime and Comp for Deutsche Bank to start global investigations Deutsche Bank Philippe Vollot, Hinrich Volcker Anti-Financial Crime ‘Audit Committee of the Supervisory Board, April 24,2018 4 Strictly ConfidentialRussian Laundromat AFC Investigation Approach as of March 16, 2018 LP ‘The Guardian and Siiddeutsche Zeitung approached DB regarding allegations that assets were transferred TD illegally via DB's correspondent banking network ‘An AFC Global Special Investigation was kicked off promptly to identify DB's exposure and to fulfil regulatory Global news broke on the Russian Laundromat scheme and the alleged DB involvement. obligations (e.9,SAR' filing) Continue to proceed with the regional investigations of the high risk entities Ensure regulators continue to be appropriately informed Post-investigation review of correspondent banking relationships Potential update of DB's internal watch lists in respect of all suspicious entities identified during the review Potential addition of alert rules to transaction monitoring systems in relation to shell entities, where possible Determine whether specific patterns of suspicious activity can be targeted and measured If so, explore the development and implementation of relevant analytics to proactively identify similar patterns to prevent them in the future J Undertake a lessons learnt exercise and implement additional controls, where required, ow for risk mitigation and pro-active management Deutsche Bank Philippe Vollot, Hinrich Volcker Anti-Financial Crime ‘Ault Committee of the Supervisory Board, April24, 2018 6 ‘Strictly ConfidentialRussian Laundromat Non-Financial Risk Grid as also shown in the monthly Chief Regulatory Officer Report AFC Matters Description of severity rating: High Are Creel ‘Significant disciplinary action taken by a Trilateral’ or Non Trilateral regulator that, affects DB globally and could resutin: © Litigation but would not result in loss of license of a key legal entity? Fines (see financials) or costs to the Bank or Client® > Possibility of action/prosecution against specific members of the senior management team of the Bank ‘Abreach of the most material regulations to DB or significant challenges with delivery of a Top Regulatory Initiative that would require the attention of Divisional unctional ExCos and/or the Management Board High financial, reputatonal andlor regulatory damage to a client or group of clients that would potentially result in © High financial loss for cient® (© High threat of tigation from client against the bank Disruption for short period to core systems utlsed by cents e.g. ATM Pee ‘Trust in Deutsche Bank's global brand is damaged but recoverable at considerable cost. This could result in © Global short-term negative media coverage High client attrition Decline in market value andlor erosion of brand integrity ‘Would require escalation to the Regional Reputational Risk Committee and potentially tothe Global Reputational Risk Committee @ eam us Likely | Very noe oe Market crea! ant [8 Important Mill Observations = eiteant FAR report High market impact for period that woul resut in Russian Laundromat ——SSS™S~S~S~S~CSC at paras sts avery pte © Conttton to los of investor conidencelsystematic falure within financial Tr system ; «© Contibuton to reduction netfctive competion in market rae ath ; © Contrivtod to system faire Severe Severity Medium ‘Minor Deutsche Bank Philippe Vollot, Hinrich Volcker Anti-Financial Crime ‘Audit Committee of the Supervisory Board, April 24, 2018 7 Stet Confidential