Foreign Bank Sanctioned for Inadequate BSA/AML Controls

The Federal Reserve Board ("FRB") issued a Consent Order to a foreign bank for inadequate Bank Secrecy Act ("BSA")/AML internal controls and other deficiencies in its risk management and governance practices.

In the Order, the FRB stated that the bank lacked adequate BSA/AML internal controls in its customer banking business. The FRB also said that the bank had failed to properly remediate previous enforcement orders for AML-related violations. The FRB pointed to the bank's insufficient progress to remediate its "compliance oversight, customer due diligence, transaction data, transaction monitoring and filtering, suspicious activity reporting, and facilitating independent third-party reviews."

The bank agreed to prioritize the completion of provisions from the previous orders, including (i) improvements to its systems and data, (ii) implementing of a customer due diligence program and (iii) establishing a transaction monitoring framework. The bank also agreed to pay a civil money penalty in the amount of $186,392,035.

In a separate Written Agreement, the FRB identified deficiencies in the bank’s governance, risk management and internal controls. The bank agreed to submit written plans subject to the FRB’s approval to improve its (i) enterprise data management program, (ii) risk and control self-assessment methodology, (iii) model risk management governance and control practices, (iv) liquidity risk management and (v) regulatory reporting.