Luxembourg authorities have carried out searches at EFG Bank Luxembourg as part of a money laundering and terrorism financing investigation connected to associates of Chechen leader Ramzan Kadyrov. The operation is part of a probe initiated in 2025 focusing on compliance with anti-money laundering (AML) regulations at the subsidiary of Swiss banking group EFG International.
Investigation triggered by whistleblower testimony
The inquiry is based substantially on evidence from former EFG bank employee Dmitry Rozanov, who in 2017 alerted management to a suspicious $100 million transaction benefiting individuals within Mr Kadyrov’s inner circle. Mr Rozanov was dismissed after raising concerns about politically exposed persons (PEPs) as clients. His testimony, now presented in a British court, has become foundational for criminal proceedings within the European Union. The case highlights ongoing concerns about the movement of funds linked to Russian elite figures through Western financial institutions.
Bank’s compliance failures under repeated scrutiny
EFG International and its subsidiaries have faced multiple investigations across Europe, Asia and the United States in recent years. The Swiss financial regulator FINMA sanctioned EFG in 2024 for serious deficiencies in its financial monitoring systems and failure to prevent money laundering. The regulator prohibited the bank from onboarding new high-risk clients until shortcomings were addressed, yet the institution continued servicing this client category. A central failure involved inadequate checks on the source of wealth for PEP clients, many with connections to Russia.
High-risk relationships maintained after Ukraine invasion
Leading global financial publications reported that EFG was among banks maintaining business relationships with high-risk clients from Russia following the full-scale invasion of Ukraine in February 2022. This activity drew intensified scrutiny from Swiss prosecutors and US authorities. The continuation of these relationships after the imposition of widespread international sanctions raised serious questions about the bank’s adherence to regulatory obligations and its internal risk controls.
Management overruled compliance warnings
A separate investigation by Belgian prosecutors found that EFG’s top management repeatedly ignored warnings from compliance officers regarding risky transactions involving funds of opaque origin from Russian clients. This approach demonstrated that financial gain was prioritised over legal consequences and international obligations regarding sanctions compliance. The pattern suggests a systemic tolerance for high-risk business that potentially facilitated the laundering of illicitly obtained money.
