Washington: The Federal Reserve on Tuesday told China Construction Bank Corp to ramp up its anti-money laundering framework, the first enforcement action by the U.S. central bank against one of China`s four largest state-owned banks.
Within 60 days, the bank should submit plans for compliance programs for anti-money laundering controls, customer due diligence programs, and methods for spotting suspicious transactions, the Fed said.
Mildred Harper, chief compliance officer for CCB`s New York branch, confirmed the enforcement action.
It is the first time the Fed has taken an enforcement action against CCB, according to the Fed`s website, where a database showed no similar enforcement actions for any of the three other large Chinese banks: Bank of China , Industrial and Commercial Bank of China and Agricultural Bank of China.
The Fed did not impose a fine or other sanctions on the bank, and did not identify what problems CCB was facing.
A tough U.S. policy has found high-profile violators among banks failing to enforce compliance in recent years.
China`s corruption watchdog said on Wednesday that inspection teams had recently started audits of four branches of CCB, although it did not mention the enforcement action or money laundering.
The Central Commission for Discipline Inspection said in a statement on its website the audits would cover "leaders` abuse of power for personal enrichment, abuse of power for own interests, corruption and other violations of discipline".
In July, 2014, BNP Paribas pleaded guilty to two criminal charges and agreed to pay almost $9 billion to resolve accusations it violated U.S. sanctions against countries such as Sudan, Cuba and Iran.
Late in 2012, HSBC Holdings Plc paid a $1.9 billion fine to U.S. authorities, a record at the time, for allowing itself to be used to launder drug money from Mexico`s Sinaloa cartel and Colombia`s Norte del Valle cartel.