The Federal Reserve and the New York Department of Financial Services (DFS) have just announced a multi-million dollar settlement with a Beijing-based banking giant.
US agencies say the Industrial and Commercial Bank of China (ICBC) will pay a total of $32.4 million for failing to follow the Bank Secrecy Act and anti-money laundering laws, neglecting to report old documents and disclosing confidential information without prior approval from regulators. .
According to DFS, the Federal Reserve System issued a cease-and-desist order to the Industrial and Commercial Bank of China and its New York branch in March 2018 after an examination showed that anti-money laundering protocols at the New York branch were inadequate. The New York branch of the Industrial and Commercial Bank of China (ICBC) is required to improve multiple areas of its systems including monitoring and reporting suspicious activity, but the Financial Services Administration notes that some problems have persisted for several years even after repeated reviews.
In addition, the FSA says a former relationship manager who worked at the New York branch of the Industrial and Commercial Bank of China (ICBC) dated several compliance documents at the request of a senior employee.
In 2015, a senior employee discovered that a former relationship manager had failed to sign USA Patriot Act certifications for some clients before leaving the company. But instead of reporting the mishap to regulators, the then-senior employee reached out to the former employee and instructed him to sign the documents using different dates in 2014 – the dates the certificates were supposed to be signed.
The former ICBC employee carried out the instructions, signing and dating certificates for five different ICBC clients. According to the Department of Financial Services, the Industrial and Commercial Bank of China (ICBC) failed to report this misconduct to management in a timely manner.
Finally, the Financial Services Administration says that Industrial and Commercial Bank of China (ICBC) violated New York’s banking law when it disclosed confidential supervisory information (CSI) to a regulator outside the United States without prior authorization in late 2021. The information disclosed included Details about regulatory investigations into the bank’s New York branch.
On top of the fine, the FSA requires the bank to submit a written plan detailing improvements in compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements, as well as in dealing with CSI.
The Industrial and Commercial Bank of China (ICBC) is the world’s largest bank with assets and locations of more than $5.742 trillion in 47 countries and regions.
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