BaFin, the financial watchdog of the Germany, has ordered the European arm of the investment banking giant Goldman Sachs to comply with rules to prevent money laundering and terrorist financing.

The watchdog had asked the investment bank to follow due diligence obligations related to customers and risk analysis requirements under the anti-money laundering laws in the country, according to a Reuters report.

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Goldman Sachs said in a statement that BaFin’s order comes after an audit undertaken by BaFin last year.

“The required implementation is already underway,” the bank said.

According to people familiar with the development, Goldman Sachs had not fully satisfied German know-your-customer standards when transferring British clients to Germany.

The data on the transferred customers did not always offer enough clarity on which persons were linked to certain accounts, said the sources.

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They also added that the watchdog could fine the bank if it did not address the issue adequately.

Due to Brexit, Goldman Sachs is transferring its clients with nearly $60bn in assets to Germany from the UK, people familiar with the matter revealed.

Last month, Goldman Sachs slashed the annual pay of its CEO David Solomon as a punitive measure for the bank’s role in the 1MDB scandal.

The pay cut reduced his package by nearly 36% to $17.5m in 2020 from $27.5m a year ago, according to regulatory disclosures.

Earlier, Goldman announced that it trimmed annual packages of its CFO Stephen Scherr and COO John Waldron.

The bank posted a 153% year-on-year surge in Q4 2020 net earnings.

In Q4 2020, total net revenues amounted to $11.74bn, up 18% from $9.95bn reported in the same quarter a year ago.