Noting some but not enough improvement since 2016 in the bank’s anti-money laundering (AML) compliance, a consent cease-and-desist order released by the Federal Reserve Thursday also imposes a $20.4 million civil money penalty against the National Bank of Pakistan, which is headquartered in Pakistan and operates in the United States.
The order refers to Bank Secrecy Act (BSA) AML violations noted in a 2016 written agreement among the bank, the Fed, and the New York State Department of Financial Services calling on the bank to correct its compliance deficiencies. It noted the bank’s installation of new management in 2019, which has worked to improve the institutions’ BSA/AML compliance, but it states that the bank and New York branch still “had not achieved full compliance with each and every provision” of the written agreement.
The order notes that the bank’s most recent examination as of March 4, 2021, disclosed “significant deficiencies” in the branch’s risk management and compliance with federal laws, rules, and regulations relating to AML compliance, including the BSA, related Treasury rules, and requirements of the Fed’s Regulation K requirements to report suspicious activity and to maintain an adequate BSA/AML compliance program.
The new order, dated Feb. 22, requires the bank and its branch to submit a revised BSA/AML compliance program for the branch that is acceptable to the Fed, a revised customer due diligence program, a written program for compliance with suspicious activity reporting requirements; and to engage a third party for transaction monitoring.
Federal Reserve Board announces $20.4 million penalty against the National Bank of Pakistan, a foreign bank operating in the United States and headquartered in Pakistan, for anti-money laundering violations