Fed raps CCB over money laundering


The Federal Reserve on On Wednesday told China Construction Bank (CCB) to ramp up its anti-money laundering framework, the first enforcement action by the US central bank against one of China’s four largest state-owned banks.

Within 60 days, the bank should submit plans for compliance programmes for anti-money laundering controls, customer due diligence programmes, 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 US policy has found high-profile violators among banks failing to enforce compliance in recent years.

China’s corruption watchdog said today 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 US sanctions against countries like Sudan, Cuba and Iran.