United States & Fed Fine China ICBC $32.4 Million for Compliance Failures of Bank Secrecy Act & Anti-Money Laundering Laws & Regulations, Further Breaches Include Backdating Compliance Documents & Failure to Report Misconduct, Disclosed Confidential Supervisory Information to Overseas Regulator
24th January 2024 | Hong Kong
United States New York State (Department of Financial Services) & Federal Reserve Board (Fed) have fined China ICBC (Industrial & Commercial Bank of China) a total of $32.4 million ($30 million & $2.4 million) for compliance failures of Bank Secrecy Act and Anti-Money Laundering laws & regulations, with further breaches including an employee backdating compliance documents & failure to report misconduct, and disclosing confidential supervisory information to an overseas regulator. Federal Reserve Board: “The Federal Reserve Board on Friday issued an enforcement action and fined the Industrial and Commercial Bank of China Ltd. and its New York branch approximately $2.4 million for their unauthorized use and disclosure of confidential supervisory information. Confidential supervisory information includes reports of bank examinations and other confidential communications by banking regulators. It is illegal to disclose confidential supervisory information without prior approval of the appropriate banking regulator. The Board’s action is being taken in conjunction with an action by the New York Department of Financial Services, the state supervisor of the bank’s New York branch. The penalties announced by the Board and the Department of Financial Services total approximately $32.4 million.” United States New York State (Department of Financial Services): “The Consent Order resolves the Department’s investigation into ICBC’s compliance failures, including multiple deficiencies in the New York branch’s BSA/AML compliance program from 2018 through 2022. The investigation also concluded that a former New York branch employee backdated several compliance documents at the direction of a then-current branch employee and that ICBC failed to report this misconduct to the Department in a timely fashion. Finally, the investigation concluded that ICBC unlawfully disclosed confidential supervisory information to an overseas regulator. As part of its agreement with the Department, in addition to paying a $30 million penalty to New York State, ICBC will be required to create a written plan, acceptable to the Department, detailing enhancements to compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements, and the handling of confidential supervisory information.”
“ United States Fines China ICBC $30 Million for Compliance Failures of Bank Secrecy Act & Anti-Money Laundering Laws & Regulations, Further Breaches Include Backdating Compliance Documents & Failure to Report Misconduct, Disclosed Confidential Supervisory Information to Overseas Regulator “
Superintendent Harris: “Bank Secrecy Act and Anti-Money Laundering laws and regulations are critical national security protections, safeguarding financial markets and consumers from bad actors. Regulated institutions must be held accountable for failing to adhere to New York’s rigorous legal and regulatory standards.”
United States Fines China ICBC $30 Million for Compliance Failures of Bank Secrecy Act & Anti-Money Laundering Laws & Regulations
19th January 2024 – Superintendent of Financial Services Adrienne A. Harris announced today that Industrial and Commercial Bank of China Ltd. (ICBC) and its New York branch have agreed to pay $30 million in penalties pursuant to a Consent Order entered into with the New York State Department of Financial Services (DFS). The Consent Order resolves the Department’s investigation into numerous Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance deficiencies and violations of New York law.
The Consent Order resolves the Department’s investigation into ICBC’s compliance failures, including multiple deficiencies in the New York branch’s BSA/AML compliance program from 2018 through 2022. The investigation also concluded that a former New York branch employee backdated several compliance documents at the direction of a then-current branch employee and that ICBC failed to report this misconduct to the Department in a timely fashion. Finally, the investigation concluded that ICBC unlawfully disclosed confidential supervisory information to an overseas regulator. As part of its agreement with the Department, in addition to paying a $30 million penalty to New York State, ICBC will be required to create a written plan, acceptable to the Department, detailing enhancements to compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements, and the handling of confidential supervisory information.
The Department coordinated its investigation with the Federal Reserve Board, which has reached a separate agreement with ICBC concerning the unauthorized disclosure of confidential supervisory information.
To review the ICBC consent order, visit the DFS website.
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