Branch of Tokyo-based Sumitomo Mitsui bank latest to face BSA/AML enforcement action

Another foreign bank operating in the U.S. has found itself at odds with the country’s anti-money laundering regulations and is now subject to an enforcement action, the Federal Reserve said Thursday.

Sumitomo Mitsui Banking Corporation of Tokyo, Japan – which operates a branch in New York – signed an agreement with the Fed to address deficiencies with its anti-money laundering (AML) program and compliance with the Bank Secrecy Act (BSA). As is typical with such agreements, the bank has 60 days to submit a written plan to enhance oversight, by the management of the bank and its branch, of the branch’s compliance with the BSA/AML requirements and the Office of Foreign Assets Control (OFAC) regulations acceptable to its local Federal Reserve Bank (in this case, the Reserve Bank of New York).

The plan is required to address BSA/AML oversight, reporting, tracking, and policies and procedures of the bank.

No fines or penalties for the bank were announced by the Fed.

The agreement with Sumitomo Mitsui is the latest of a recent string of BSA/AML actions taken against foreign banks. In February, the Office of the Comptroller of the Currency (OCC) announced it had issued a cease and desist order against three branches of MUFG Bank Ltd., Tokyo, Japan, for violations of BSA and related rules.

In June 2018, the New York branch of the Bank of China was cited for BSA/AML deficiencies and assessed a $12.5 million civil money penalty (CMP) by the OCC. And in April of last year, a New York branch of Taiwan-based Hua Nan Commercial Bank Limited of Taipei City, Taiwan, agreed to a cease and desist order after “significant deficiencies” in risk management and compliance relating BSA/AML were uncovered by regulators, the Federal Reserve.

Federal Reserve Board issues enforcement action with Sumitomo Mitsui Banking Corporation