News
Adjusting Risk Matrices to Enter Markets Can Be Daunting AML Task, Say Consultants
By Brian Monroe
printLibya, once at the top of U.S. economic sanctions lists, is now making payments for peace. Russia, the former archenemy of the United States, is today its tense ally. China, perceived as a corrupt communist stronghold, has seen U.S. banks pay billions for entr?©e into the lucrative Asian market. When a country is finally free of U.S. watch lists, or improves its standing with the international community, financial institutions are faced with the task of scaling back their risk profiles. The payoffs for getting a footprint in an emerging but once off-limits market can be big, particularly if other business...
TO READ THE FULL STORY
Related News
Large banks need to clearly delineate which senior executives are responsible for Bank Secrecy Act compliance violations, the U.S. Comptroller of the Currency said in a speech Monday.
The U.S. regulator of national banks has begun stress testing midsize financial institutions for adequate safety and soundness controls, including anti-money laundering and sanctions checks, say financial lobbyists and compliance officers.
Prompted by financial regulators, some of the largest U.S. banks have been reevaluating how they gauge geographic financial crime risks in designated high-risk regions of the country, say sources.
Since 2008, federal financial regulators have increasingly quizzed compliance staff about such scenarios in an effort to determine how banks are distinguishing their low-, moderate- and high-risk clients, according to bank officials.
An intergovernmental watchdog that recommends regulations to fight money laundering will release a global threat assessment of the crime as early as 2010, as part of an effort to prod countries to stiffen their laws.
The OCC has asked financial institutions to submit comments about the data collection system, which the agency says is designed to "enhance the ability of examiners and bank management" to identify money laundering risks in bank products, services, customers and locations.
The Financial Action Task Force identified key elements of gauging geographic and other risks and of defining acceptable threat levels to aid governments and financial institutions adopting a risk-based approach to their anti-money laundering programs.
Treasury Secretary Henry Paulson, speaking Friday at the Financial Crimes Enforcement Networks headquarters, announced initiatives that include a more risk-based examination process and a narrower definition of the money services businesses industry.
Henry Paulson, at a meeting scheduled for Friday at the Financial Crimes Enforcement Networks headquarters, will disclose plans to improve risk-based exam procedures for institutions, people familiar with the matter said.
A survey of 34 government entities and large banks by the Financial Action Task Force suggests they don't agree on how institutions should adopt the risk-based approach, whereby banks identify their risks then allocate anti-money laundering resources to the most vulnerable areas.
The Federal Reserve and New York State Banking Department entered into a written agreement with Sumitomo Mitsui Banking Corp. on Wednesday ordering its New York branch to improve Bank Secrecy Act compliance deficiencies a month after another Japanese bank was cited for risk management deficiencies.
Lisa Arquette, associate director of the FDIC's Anti-Money Laundering and Financial Crimes Branch, says examiners are conducting fewer risk assessments as more banks prepare their own.