Puerto Rico International Banking Entity Fined for AML/BSA Failures

A Puerto Rico-based International Banking Entity ("IBE") settled charges with FinCEN for failing to (i) file suspicious activity reports ("SARs"), (ii) conduct adequate due diligence for foreign correspondent accounts and (iii) implement an anti-money laundering compliance ("AML") program.

In an Order, FinCEN stated that the bank provided services to foreign financial institutions in Central America and the Caribbean including to parties based in Venezuela. Despite the elevated risk for AML concerns and need for "robust Bank Secrecy Act compliance," the bank did not file any SARs for any transaction as it moved "large amounts of money internationally on behalf of high-risk customers, including those located in Venezuela." FinCEN identified "hundreds of millions of dollars in suspicious transactions" for which the bank should have filed SARs. This was FinCEN's first enforcement action against a Puerto Rico-based IBE for the failure to implement and maintain an AML compliance program; an obligation that became effective in March 2021.

As a result of its findings, FinCEN assessed a $15 million civil money penalty against the IBE for violating provisions of the BSA and failing to implement an AML program.