KARACHI: The National Bank of Pakistan (NBP) has entered into a written agreement with New York State Department of Financial Services (NYSDFS) and the Federal Reserve Bank of New York to strengthen compliance with bank secrecy act/anti-money laundering (BSA/AML) requirements, as well as the regulations issued by the Office of Foreign Assets Control (OFAC) at the bank’s New York branch.
“The most recent examination of the branch conducted by the Federal Reserve Bank of New York and the NYSDFS identified deficiencies relating to the branch’s risk management and compliance with applicable federal and state laws, rules and regulations relating to AML compliance, including the BSA,” said the agreement, according to an announcement of the NYSDFS.
“Within 30 days of this agreement, the bank and the branch will engage an independent third party acceptable to the supervisors to conduct a review of the branch’s US dollar clearing transaction activity and international remittance transaction activity from July 1, 2014 to Dec 31, 2014 to determine whether suspicious activity involving high-risk customers or transactions at, by, or through the branch was properly identified and reported in accordance with applicable suspicious activity reporting regulations and to prepare a written report detailing the third party’s findings,” said the agreement.
NBP’s board of directors and the branch’s management will take all necessary steps to ensure its management promptly communicates to the supervisors all communications received from regulators other than the supervisors that relate to the branch’s compliance with all applicable laws and regulations to which it is subject.
The agreement requires the bank to submit written plans to DFS and the New York Fed within 60 days documenting how its BSA/AML/OFAC compliance, monitoring, oversight and suspicious activity reporting will be improved. Any breach of the terms of the agreement by the bank will result in additional enforcement action.
Written plans are required to include enhancements of internal controls for correspondent accounts. Additionally, the plans are to include measures to ensure that those with compliance responsibilities possess appropriate subject matter expertise, and that adequate resources are allocated to ensure compliance with BSA/AML/OFAC requirements.
Under the agreement, the NBP is also required to submit quarterly progress reports to the regulators.
Within 30 days after the end of each calendar quarter following the date of this agreement, the bank and the branch will submit to the supervisors written progress reports detailing the form and manner of all actions taken to secure compliance with the provisions of this agreement and the results thereof.
In a written reply to Dawn, an NBP spokesman said: “On March 24, 2016, National Bank-USA signed a written agreement with the New York Fed and NYSDFS. The agreement calls for the bank to have an independent review of the BSA/AML compliance programme and the governance oversight.”
“NBP-USA takes this agreement very seriously and will incorporate recommendations from the independent review immediately to align the compliance programme with the regulatory standards.
The US branch “has already implemented a number of improvements to the BSA/AML compliance programme and will continue to further enhance the programme to strengthen the bank’s compliance function as a whole”.
Courtesy : Dawn News