Fed faults Commerzbank foreign account controls
Monday, October 21, 2013 at 2:08AM
Julie DiMauro in AML, Bank Secrecy Act, Commerzbank AG, Due Diligence, Federal Reserve, Germany, U.S. Federal Reserve, best practices, cease and desist order, suspicious activity report

The U.S. Federal Reserve said last week it was requiring Commerzbank AG in Germany and its New York branch to improve compliance with federal and state anti-money laundering (AML) laws.

The Fed action didn't involve allegations of corruption or specific charges. But it provided a window into AML compliance best practices.

In June 2012, Commerzbank had agreaed to improve AML compliance. A recent Fed examination, however,  showed that the bank was still falling short.

The New York branch's Bank Secrecy Act (BSA) and AML compliance program was deemed "unable to maintain appropriate and adequate internal controls for its banking operations." This included the failure to create adequate internal controls and mitigate risks associated with the bank's foreign correspondent accounts.

The Fed's new cease and desist order didn't impose any financial penalties.

The cease and desist order specified a new governance and customer due diligence best practices so the bank's New York branch can meet the objectives of the 2012 agreement more fully. These include:

Within 30 days after each calendar quarter, Commerzbank AG and its New York branch must file joint progress reports about what they've done in furtherance of the order and its goals.

The October 17, 2013 Federal Reserves Cease and Desist Order against Commerzbank AG (Frankfurt am Main, Germany) and Commerzbank AG New York Branch (New York, New York) Docket Nos. 13-027-B-FB and 13-027-B-FBR can be found here.

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Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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