Bank of America, the second-largest bank in the US, has faced fines totalling more than $1.21 billion for violations of anti-money laundering requirements and compliance with sanctions legislation. Regulators pointed to deficiencies in identifying suspicious transactions, vetting customers and enforcing sanctions restrictions.
WHY BANK OF AMERICA WAS FINED
According to Al Jazeera, the bulk of the penalties were imposed for deficiencies in its anti-financial crime system. The Financial Crimes Enforcement Network FinCEN imposed a fine of $1.2 billion on the bank for failing to properly identify and report risks to national security, including the activities of Chinese money laundering networks and illicit financial flows on the south-western border of the US.
The agency said the bank was late in reporting suspicious transactions worth more than $5 billion. Among the deficiencies identified were procedures for identifying suspicious transactions, reporting them to regulators and vetting customers. According to the Department of the Treasury, the bank effectively delegated a significant portion of its responsibilities for independently identifying and reporting such transactions to third parties.
WHAT OTHER FINES REGULATORS IMPOSED
The Office of the Comptroller of the Currency (OCC) imposed $750 million for the insufficient effectiveness of its anti-money laundering programme. The Department of the Treasury noted that this is the largest fine in the OCC's history.
At the same time, the FinCEN penalty takes into account credit for the OCC fine, so the stated amounts cannot simply be added together. Separately, the Office of Foreign Assets Control (OFAC) announced a settlement with the bank for $11.6 million in connection with alleged violations of several sanctions programmes, including those related to Iran, Russia, drug trafficking and international terrorism.
WHAT VIOLATIONS ARE INVOLVED
Bank of America agreed to settle claims relating to 475 alleged violations of various sanctions programmes. The settlement provides for obligations to improve compliance, including staff training, testing of procedures, auditing, and further engagement with OFAC.
The agency's statement emphasises that deficiencies in the work of a major bank can create risks for the entire US financial system, since transactions linked to potentially illicit financial flows pass through it.
HOW THE BANK RESPONDED
Bank of America said it takes compliance with anti-financial crime requirements seriously and acknowledges its responsibility for properly organising this work.
Bank representatives said the company has invested billions of dollars in technology and brought in thousands of employees to combat financial crime. According to them, work to address the regulators' findings is already well advanced, and the bank intends to see it through to completion.
