Chi­nese bank fined for money laun­der­ing

The Myanmar Times - - International Business -

NEW York’s state bank reg­u­la­tor has fined the gi­ant Agri­cul­tural Bank of China US$215 mil­lion for vi­o­lat­ing anti-mon­ey­laun­der­ing laws and ob­scur­ing sus­pi­cious trans­ac­tions in­volv­ing Rus­sia, China, Afghanistan and other coun­tries.

Cit­ing a de­lib­er­ate fail­ure to scru­ti­nise du­bi­ous money trans­fers, the De­part­ment of Fi­nan­cial Ser­vices said the bank, the third­largest in the world, cre­ated “a sub­stan­tial risk” that ter­ror­ist groups, sanc­tions-barred coun­tries and crim­i­nals could have passed funds through the bank. The bank had also “si­lenced” a whistle­blower who at­tempted to carry out in­ter­nal in­ves­ti­ga­tions, ac­cord­ing to the DFS.

The move by the pow­er­ful New York reg­u­la­tor fol­lowed a Septem­ber ac­tion by the Fed­eral Re­serve, which or­dered AgBank to im­prove in­ter­nal con­trols against money laun­der­ing. Natasha Taft, a for­mer staffer, set­tled a law­suit against the bank that month af­ter claim­ing she had been forced out of her job af­ter re­port­ing po­ten­tial vi­o­la­tions to the Fed.

DFS also said bank staff had taken de­lib­er­ate steps to hide US dol­lar trans­ac­tions pass­ing through its New York branch that could have been tied to vi­o­la­tions of trade sanc­tions and anti-money laun­der­ing laws. Bank ex­am­in­ers found the bank had used “eva­sive” trans­ac­tion meth­ods, in­clud­ing mask­ing the true iden­tity of par­ties to trans­ac­tions us­ing SWIFT, the global net­work which en­ables fi­nan­cial trans­fers.

Ex­am­in­ers iden­ti­fied un­usu­ally large round-dol­lar trans­ac­tions be­tween Chi­nese com­pa­nies and coun­ter­par­ties in Rus­sia and Ye­men, dol­lar pay­ments be­tween a cus­tomer of Turk­ish Bank and a client at Afghan Bank whom the US Trea­sury had linked to a fi­nan­cial net­work used to fund drug traf­fick­ing.

“Cer­tain in­voices in­volv­ing China and Rus­sia ap­peared to be coun­ter­feit or fal­si­fied, while other doc­u­ments sug­gested US-dol­lar trades with Ira­nian coun­ter­par­ties – in­clud­ing doc­u­men­ta­tion in­di­cat­ing dol­lar trans­ac­tions were made for a sanc­tioned coun­ter­party,” the DFS said.

The bank also de­lib­er­ately ig­nored warn­ings from the agency to im­prove its in­ter­nal com­pli­ance mea­sures as the vol­ume of in­ter­na­tional trans­ac­tions in­creased be­gin­ning in 2013.

In ad­di­tion to pay­ing the penalty, the bank agreed to take im­me­di­ate steps to im­prove its le­gal com­pli­ance, in­clud­ing hir­ing an out­side mon­i­tor. –

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