The Federal Reserve has ended a five-year-old enforcement action against one of China's Big Four banks and its New York branch.
On Thursday, the Fed terminated a cease-and-desist order leveled against the Agricultural Bank of China and its New York branch in 2016 for failing to meet requirements of anti-money-laundering rules, the Bank Secrecy Act and other compliance regulations.
Along with the Fed's cease and desist order, the Agricultural Bank of China, also known as AgBank, was fined $215 million by the New York State Department of Financial Services at the time for violating the state's AML laws.
The New York agency did not immediately respond to a request for comment for this article.
By lifting its order, the Fed has signaled that the institutions have implemented the various controls called for in the order, including improving governance and management oversight practices, creating a BSA/AML compliance program and better monitoring suspicious activity.
AgBank was also required to improve its compliance with the Treasury Department's Office of Foreign Asset Control and conduct a review of its clearing transactions between Oct. 1, 2014, and March 31, 2015, to determine whether suspicious activity had been properly identified and reported. Other stipulations of the cease and desist order called for the banks to improve their practices for handling suspicious activities and vetting customers.
AgBank, the third-largest lender in China behind the Industrial & Commercial Bank of China and the China Construction Bank Corporation, was one of several prominent Chinese institutions to run afoul of U.S. regulators around that same time frame.
In 2015, the Bank of China — another Big Four bank — reached an agreement with the Treasury to improve its anti-money-laundering practices. That same year, the Fed issued an enforcement action against China Construction Bank Corp. for similar concerns.
Earlier this year the Chinese central bank, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission jointly announced new AML rules aimed at bringing institutions in their country into alignment with their peers in other major economies.
