The Federal Reserve and New York’s 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 comply with the Bank Secrecy Act and anti-money laundering laws, failing to report backdated documents and disclosing confidential information without prior permission from supervisors. .
According to the DFS, the Federal Reserve System issued a cease and desist order to ICBC and its New York branch in March 2018 after an investigation revealed 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 monitoring and reporting suspicious activity, but the DFS notes that some problems persisted for years even after repeated reviews.
In addition, the DFS says a former relationship manager who worked at ICBC’s New York branch retroactively dated several compliance documents at the behest of a senior employee.
In 2015, a senior employee discovered that a former relationship manager failed to co-sign some clients’ USA Patriot Act certifications before leaving the company. But instead of reporting the accident to supervisors, the then-senior employee contacted the former staff member with instructions to co-sign the documents on various dates in 2014 – dates when the certifications should have been signed.
The ex-ICBC employee did as he was told, signing and retroactively dating the certifications of five different ICBC customers. According to the DFS, ICBC “failed to report this misconduct to the ministry in a timely manner.”
Finally, 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 released included details of regulatory investigations into the bank’s New York branch.
In addition to the fine, the DFS requires the bank to submit a written plan detailing improvements in compliance policies and procedures, corporate governance and management oversight, customer due diligence requirements and CSI handling.
ICBC is the largest bank in the world with more than $5.742 trillion in assets and locations in 47 countries and regions.
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