Regulator Finds Citibank in Violation of Bank Secrecy Act

The U.S. banking regulator – The Office of the Comptroller of the Currency – has ordered Citigroup’s Citibank subsidiary to stop violating the Bank Secrecy Act and correct lax monitoring of client accounts.
The regulator’s cease and desist order states that Citibank has “internal control weaknesses including the incomplete identification of high risk customers in multiple areas of the bank” and the “inability to assess and monitor client relationships on a bank-wide basis.”
The Bank Secrecy Act (BSA) requires filing suspicious activity reports and overall customer due diligence, among other compliance components.
The OCC has not imposed a fine at this time.
“The bank has begun corrective action, and has committed to taking all necessary and appropriate steps to remedy the deficiencies identified by the OCC and to enhance the bank’s BSA compliance program,” the OCC said
The regulator found that the bank’s BSA compliance had deficiencies regarding internal controls, anti-money laundering audits, monitoring of remote deposits and processing certain foreign correspondent transactions.
Citibank was also cited for not applying sufficient suspicious activity reporting related to monitoring of foreign accounts.
The bank reported to the OCC that from 2006 through 2010 it had failed to adequately monitor its remote deposit transactions, or “cash letter instrument processing,” in connection with foreign correspondent banking. Cash letter instruments usually involve funds transfers from foreign financial institutions and can be vehicles for money laundering activities if not properly monitored.

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