OCC issues cease and desist order against Japanese bank for BSA/AML issues

Federal Issues OCC Cease and Desist Bank Secrecy Act Anti-Money Laundering Financial Crimes Of Interest to Non-US Persons Compliance

On February 22, the OCC announced a cease and desist order against three U.S. branches of a Japanese bank for allegedly violating the Bank Secrecy Act (BSA). According to the order, after an examination of the branches’ BSA/Anti-Money Laundering and OFAC compliance programs, the OCC identified alleged deficiencies in the branches’ BSA compliance program, including (i) internal controls; (ii) suspicious activity monitoring, which resulted in untimely suspicious activity report filings; (iii) foreign correspondent due diligence program; and (iv) trade finance monitoring. The OCC did not issue a monetary penalty against the branches and noted in the order’s announcement that the branches have already begun corrective actions. This action demonstrates U.S. banking regulators’ continued scrutiny of the BSA compliance programs of U.S. branches and subsidiaries of non-U.S. banks that provide international access to the U.S. financial system.

As previously covered by InfoBytes, in November 2017, the OCC issued a consent order with the branches that required corrective actions related to OFAC compliance. The branches continue to operate under this order.