ZTE Corporation has agreed to enter a guilty plea and to pay a combined penalty of $1.19 billion to U.S. regulators and agencies for conspiring to violate the International Emergency Economic Powers Act (IEEPA) sanctions on Iran by illegally shipping US-origin items to Iran, obstructing justice and making a material false statement.
The Financial Crimes Enforcement Network and Office of Comptroller of the Currency (OCC) announced penalties of $1 million and $7 million, respectively, for Merchant Bank’s alleged willful violations of BSA regulations. Investigations carried out by the regulators found the Bank to have a deficient BSA/AML Program, especially in the areas of risk assessment, AML controls, suspicious activity reporting and customer due diligence.
Deutsche Bank AG and its New York branch have been ordered to pay a $629 million fine and hire an independent monitor as part of a consent order entered into with the New York State Department of Financial Services (NYDFS) and the UK’s Financial Conduct Authority (FCA) for violations of anti-money laundering laws involving a “mirror trading” scheme among the bank’s Moscow, London and New York offices that laundered $10 billion out of Russia.
The Federal Reserve together with the Federal Deposit Insurance Corporation (FDIC) has imposed a cease and desist order on the North-Carolina based Bank for significant deficiencies identified in its BSA/AML compliance program and for failing to comply with regulatory requirements. The order requires BB&T to implement an effective BSA/AML risk management program that is commensurate with the Bank’s risk profile.
DOJ, FTC and FinCEN Order Western Union to pay $586m in Fines and Restitution for Fraud and AML Violations
Western Union was hit by a coordinated action by the US Department of Justice, Federal Trade Commission and the Financial Crimes Enforcement Network, for lapses in the company’s AML controls which allowed hundreds of millions of dollars in prohibited transactions to be processed, enabling the proliferation of illegal gambling and scams that defrauded tens of thousands of victims.
In one of its final actions before leaving office, the Obama administration issued a General License that effectively lifts trade sanctions with Sudan and unblocks the Government of Sudan property currently held by US companies and financial institutions. Sudan however, continues to be designated as a state sponsor of terrorism and is subject to certain targeted sanctions.
FinCEN enacted a final rule under Section 311 of the USA PATRIOT Act to further restrict North Korea’s access to the US financial system. The rule prohibits U.S. financial institutions from opening or retaining correspondent accounts for North Korean banks and requires that enhanced due diligence be applied to prevent North Korean financial institutions from gaining unlawful surreptitious access to US correspondent accounts through front companies and agents.
The New York State regulator ordered Agricultural Bank of China to pay a $215m penalty and retain an independent monitor to address serious deficiencies within the Bank’s BSA/AML Compliance program. According to the Consent Order, the DFS uncovered intentional efforts by Bank officials to conceal certain US Dollar transactions conducted through the Bank’s New York branch by sending coded messages through SWIFT and masked true parties to transactions.
FinCEN has issued an advisory to financial institutions that warns of Cybercriminals targeting the U.S. financial system to defraud the system, consumers and to further illegal activities. The advisory aims to remind financial institutions of their obligations under the Bank Secrecy Act (BSA), as they relate to cyber-events and cyber-enabled crime.
The OCC released guidance to U.S. banks regarding periodic assessment of the risks related to foreign correspondent bank accounts. The guidance restates the supervisory expectation for banks to establish policies and procedures to conduct risk assessments for foreign correspondent accounts and to periodically re-evaluate the risk posed by these accounts. The guidance also describes corporate governance best practices when conducting these periodic evaluations of risk and making decisions to retain or terminate foreign correspondent accounts.