More banks facing u. s. anti-money laundering scrutiny – fitch ratings

Fitch Ratings-Chicago-05 April 2013: U.S. Money laundering vancouver banking regulators have taken action on a number of highly visible violations of the Bank Secrecy Act (BSA), anti-money laundering (AML) laws, and the USA PATRIOT Act (Patriot Act) over the last few months, which points to the growing costs of BSA/AML compliance and increasing risks of potentially material fines, according to Fitch.

The BSA is the key piece of legislation in the U.S. Types of money laundering governing banks’ potential involvement with customers engaged in money-laundering activities. Define money laundering The law requires financial institutions to assist federal agencies in the detection and prevention of money laundering. Anti money laundering training courses The Fed, along with the OCC and FDIC, has recently increased the visibility of regulatory actions against banks in connection with enforcement of the BSA. What is the definition of money laundering These actions have not been confined to the largest banks, but a series of actions related to multinational institutions have received considerable public attention, and banks have been more forthcoming in identifying AML compliance costs as an issue in their filings.

Citigroup, which must comply with a Fed consent order on AML procedures issued in March, has noted that its extensive activities in emerging markets expose it to greater AML scrutiny by U.S. Anti money laundering registration agencies, driving a need for big investments in compliance infrastructure. Money laundering books The Fed noted in its consent order that the Citigroup holding company lacked sufficient internal controls to ensure compliance with AML regulations.

The real costs of AML and BSA compliance for U.S. Money laundering procedures and foreign banks are becoming clearer in the wake of fines levied against HSBC ($1.9 billion) and Standard Chartered ($667 million) in recent months. Money laundering meaning in english Neither Citi nor JPM have as yet been fined in connection with AML compliance shortcomings. Anti money laundering regulations for banks In HSBC’s case, the bank was penalized approximately two years after the issuance of the OCC’s cease and desist order. Money laundering definition in hindi In addition to these fines, ongoing compliance costs will stem from investments in procedures, staff, and infrastructure; reporting requirements; facilitation of regulatory on-site monitoring; and compliance with remediation programs.

HSBC indicated that its U.S. Sentence for money laundering uk compliance costs rose significantly last year. Money laundering investopedia Management has noted that the biggest driver of the change has been the bank’s investment in AML/BSA compliance infrastructure, along with actions to address the regulatory consent orders relating to foreclosure activities. Anti money laundering policy Citi and JPM also highlighted required AML compliance investments as a likely driver of higher costs in 2013.

In addition to the banking regulators, Congress has taken a leading role in identifying potential AML compliance lapses. Global money laundering This was evident in the Senate’s Permanent Subcommittee on Investigations’ hearing on money laundering, drugs, and terrorist financing in 3Q12. Acca money laundering We expect a continuation of congressional involvement in the medium term.


For customers of affected banks, tougher AML scrutiny will likely lead to longer transaction times, increased documentation requirements, and potentially higher fees. Latest money laundering news After 9/11, regulatory agencies have scrutinized possible AML activity among midsized banks with sizable overseas customer bases (e.g. Lawyer money laundering Miami-based banks serving Latin American customers), and additional regulatory compliance may drive operating costs higher. Money laundering gift cards It is conceivable that the increased costs of doing business with international customers could push some banks out of certain global businesses.

Outside the U.S., Swiss private banks in particular are feeling the pressure from AML/BSA regulation. Money laundering legal definition For these companies, the benefits of dealing with U.S. How does money laundering work customers are increasingly outweighed by the costs. Money laundering ppt The recent case of Wegelin & Co. Drug trafficking and money laundering Privatbankiers illustrates this most prominently, having culminated in the bank’s closure after it pleaded guilty to helping U.S. What is the purpose of money laundering citizens evade paying taxes and $74 million in fines and restitutions.

AML/BSA compliance costs are significant but have been manageable to date for large banks such as HSBC, Citi, and JPM. Integration money laundering Compliance costs are larger on a size-adjusted basis and potentially material for some smaller banks on a credit quality perspective. Money laundering and terrorist financing We expect that these and the growing burden of regulatory costs, such as the Dodd-Frank Act and Basel III, will continue to weigh on overall bank profitability over the near-to-medium term

The above article originally appeared as a post on the Fitch Wire credit market commentary page. Money laundering documentary The original article can be accessed at www.fitchratings.com. Bank money laundering All opinions expressed are those of Fitch Ratings.

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