The Industrial and Commercial Bank of China (ICBC) Settles with US Agencies
The Federal Reserve and New York Department of Financial Services (DFS) have reached a settlement with the Industrial and Commercial Bank of China (ICBC), a Beijing-based banking giant. ICBC will pay a total of $32.4 million for violating the Bank Secrecy Act and Anti-Money Laundering laws. The bank failed to report backdated documents, disclosed confidential information without authorization, and had inadequate anti-money laundering protocols at its New York branch.
Issues with ICBC’s Anti-Money Laundering Protocols
In 2018, the Federal Reserve issued a cease and desist order to ICBC’s New York branch after finding inadequate anti-money laundering protocols. Despite repeated reviews, some issues persisted for years. Additionally, a former relationship manager at ICBC’s New York branch backdated compliance documents as instructed by a senior employee.
Failure to Report Misconduct
When a senior employee discovered that the relationship manager had failed to countersign USA Patriot Act certifications, instead of reporting it, they instructed the former staff member to backdate the documents using different dates in 2014. ICBC did not report this misconduct promptly.
Violation of Banking Law
ICBC violated a New York Banking Law by disclosing confidential supervisory information to a regulator outside the United States without prior authorization. This information included details about regulatory investigations on the bank’s New York branch.
Penalties and Requirements
In addition to the fine, the DFS is requiring ICBC to submit a written plan outlining improvements in compliance policies and procedures, corporate governance, management oversight, customer due diligence requirements, and handling of confidential supervisory information.
About ICBC
ICBC is the world’s largest bank with over $5.742 trillion in assets and operations in 47 countries and regions.
Hot Take: ICBC Faces Consequences for Compliance Failures
The Industrial and Commercial Bank of China (ICBC) has been hit with a multimillion-dollar settlement by the Federal Reserve and New York Department of Financial Services (DFS) for violating anti-money laundering laws and failing to report backdated documents. This case highlights the importance of strong anti-money laundering protocols and compliance measures in the banking industry. The penalties imposed on ICBC, including a hefty fine and requirements for improvement, serve as a reminder that financial institutions must prioritize regulatory compliance to maintain trust and integrity in their operations.
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