Fed finds AML problems at U.S. branch of Japanese bank

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WASHINGTON — The Federal Reserve Board is ordering Sumitomo Mitsui Banking Corp. to correct anti-money-laundering deficiencies in the Japanese bank's U.S.-based branch.

The Fed issued an enforcement action against both the bank — one of the largest financial institutions in Japan — and the branch located in New York, citing deficiencies related to risk management and compliance with the Bank Secrecy Act.

Under the written agreement between the company and the Federal Reserve Bank of New York, the bank’s board of directors must submit written plans within 60 days on how the company will enhance oversight of the New York branch’s AML procedures.

The bank and branch must also submit a revised customer due diligence program within 60 days that meets the satisfaction of the regulator. The enforcement action is dated April 23.

The bank and the branch must also submit a written program, within 60 days, to ensure accurate and timely reporting of suspicious transactions, as required by applicable laws, as well as written plans to enhance compliance with Office of Foreign Asset Control regulations.

The bank must also designate an official responsible for coordinating the submission of all plans to the New York Fed within the next 10 days.

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