World’s Largest Bank To Pay $32,400,000 for Violating Bank Secrecy Act, Backdating Documents and Exposing Confidential Information

World’s Largest Bank To Pay $32,400,000 for Violating Bank Secrecy Act, Backdating Documents and Exposing Confidential Information

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The Federal Reserve and New York Department of Financial Services (DFS) just announced a multi million-dollar settlement with a Beijing-based banking giant.

The 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 backdated documents and revealing confidential information without prior approval from regulators.

According to the DFS, the Federal Reserve System issued a cease and desist order to ICBC and its New York branch in March of 2018 after an examination showed that the New York branch’s anti-money laundering protocols were inadequate. The order required ICBC’s New York branch to improve multiple areas in its systems including suspicious activity monitoring and reporting, but the DFS notes that some issues persisted for several years even after repeated reviews.

In addition, the DFS says a former relationship manager who worked at ICBC’s New York branch backdated several compliance documents at the behest of a senior employee.

In 2015, a senior employee discovered that a former relationship manager failed to countersign the USA Patriot Act certifications of some clients before leaving the company. But instead of reporting the mishap to regulators, the then-senior employee reached out to the former staff member with instructions to countersign the documents using different dates in 2014 – dates when the certifications should have been signed.

The ex-ICBC employee did as instructed, signing and backdating the certifications of five different ICBC clients. According to the DFS, ICBC “failed to report this misconduct to the Department in a timely fashion.”

Lastly, the DFS says ICBC violated a New York Banking Law when it disclosed confidential supervisory information (CSI) to a regulator outside the United States without prior authorization in late 2021. The information divulged involved details about regulatory investigations on the bank’s New York branch.

On top of the fine, the DFS is requiring the bank to submit a written plan that details improvements in compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements as well as in the handling of CSI.

ICBC is the largest bank in the world with over $5.742 trillion in assets and locations in 47 countries and regions.

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