Federal Reserve Board, New York DFS Issue Joint Enforcement Action Against U.S. Branch Of Foreign Bank


On April 4, the Federal Reserve Board released a March 25, 2013 written agreement between the Federal Reserve Board, the New York Department of Financial Services, and a German bank and its U.S. branch regarding certain BSA/AML deficiencies at the U.S. branch. The agreement requires that the bank and the branch retain within 30 days an independent consultant to conduct a comprehensive review of the branch’s compliance with BSA/AML rules and state regulations, and subsequently prepare a report of the findings. The agreement further requires that within 60 days of the compliance report prepared by the consultant, the bank and the branch (i) submit a written enhanced BSA/AML compliance program for the branch, (ii) submit a written plan to improve and enhance management oversight of the branch’s compliance program, (iii) submit a written program to improve customer due diligence and a written program to ensure timely and accurate SAR reporting, and (iv) engage a different independent testing consultant to develop a risk-based BSA/AML audit program and conduct an independent compliance test. In addition, the agreement requires the bank and the branch to submit within 60 days of the agreement a written plan to enhance compliance with OFAC requirements.

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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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