Federal Reserve Board Announces BSA/AML Compliance Action

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On October 17, the Federal Reserve Board released a cease and desist order against a foreign bank and its New York branch over alleged BSA/AML compliance failures. After entering into a Written Agreement in June 2012 that required the branch to improve compliance with BSA/AML in connection with the branch’s bulk cash transactions business line, the Federal Reserve Bank of New York conducted an examination to assess the effectiveness of the branch’s BSA/AML compliance program in other business lines. This examination identified an alleged failure of the branch to maintain an adequate risk-based compliance program to mitigate the BSA/AML risks associated with the branch’s foreign correspondent accounts.   The order requires the bank and the branch to (i) retain an independent consultant to assess, and prepare a compliance report on, the branch’s compliance with the BSA/AML requirements, (ii) submit an enhanced BSA/AML compliance program, (iii) submit an enhanced customer due diligence program and an enhanced suspicious activity reporting program, and (iv) retain an independent consultant to conduct a suspicious activity review of U.S. dollar transactions cleared over a six month period in 2012. In addition, the bank’s board and the branch management must jointly submit a written management oversight plan.

Topics:  Anti-Money Laundering, Bank Secrecy Act, Compliance, Federal Reserve

Published In: Civil Procedure Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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