The US Federal Reserve and the New York Department of Financial Services (DFS) just announced a multi-million dollar settlement with a major Beijing-based bank.
US distributor To tell Industrial and Commercial Bank of China (ICBC) pay The company was awarded a total of $32.4 million in damages for failing to comply with bank secrecy and anti-money laundering laws, failing to report historical documents, and divulging confidential information without prior regulatory approval.
The Federal Reserve issued a cease and desist order to ICBC and its New York branch in March 2018 after an inspection found the branch's anti-money laundering protocols were inadequate, according to DFS. The order required ICBC's New York office to improve several areas within its systems, including suspicious activity monitoring and reporting, but DFS said that even after repeated reviews, some problems persisted for several years. He points out that
Additionally, DFS said a former relationship manager who worked at ICBC's New York branch retroactively created several compliance documents at the behest of senior employees.
In 2015, a senior employee discovered that a former relationship manager had failed to co-sign some clients' USA PATRIOT Act certifications before leaving the company. But instead of reporting the incident to regulators, the then-senior employee contacted the former staff member and counter-signed the document using a different date in 2014 (the date the certificate should have been signed). I instructed him to do so.
The former ICBC employee followed instructions and signed and backdated certificates for five different ICBC customers. DFS said ICBC “failed to report this misconduct to authorities in a timely manner.”
Finally, DFS said ICBC violated New York Banking Law when it disclosed confidential supervisory information (CSI) to non-U.S. regulators in late 2021 without prior authorization. The leaked information included details about a regulatory investigation into the bank's New York branch.
In addition to the fine, DFS is requiring the bank to submit a written plan detailing its compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements, and improvements to its handling of CSI.
ICBC is the world's largest bank with more than $5,742 billion in assets and locations in 47 countries and territories.
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