The US Federal Reserve on Thursday issued a cease and desist order against Taiwan’s Hua Nan Commercial Bank (華南銀行) and its agency in New York, citing non-compliance with anti-money laundering (AML) regulations.
In a statement, the Fed said it had identified significant flaws in the agency’s risk management and compliance with US federal laws, rules and regulations relating to money laundering, including the Bank Secrecy Act (BSA), during the most recent examination that was concluded on June 30 last year.
However, Hua Nan has taken steps to mitigate its BSA/AML risk and to continue to implement improvements in the oversight of a compliance program involving the New York agency, the Fed said.
In addition, the Fed said it reached an agreement on Thursday with the bank and the agency to issue the cease-and-desist order and take affirmative action.
Under the agreement, a plan is to be submitted in writing within 60 days to improve the agency’s compliance with BSA/AML requirements and regulations issued by the Office of Foreign Assets Control of the US Department of the Treasury, the Fed said.
This is not the first time that a Taiwanese bank has been found not to be compliant with laws against money laundering in the US.
In January, the Fed slapped a US$29 million fine on the New York, Chicago and Silicon Valley branches of Mega International Commercial Bank (兆豐銀行) after identifying significant deficiencies relating to their risk management and compliance with BSA/AML requirements.
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