Monthly Archives: November 2016

November 15, 2016

Divergent State and Federal Approaches to AML and Sanctions Threats from China

by Jeremy Paner

empire-state-buildingOn November 4, the  Friday before the U.S. election, the New York Department of Financial Services (DFS) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced separate enforcement actions targeted at the AML and sanctions threats emanating from China. While DFS explicitly set forth its allegations against a Chinese state bank, the U.S. Treasury Department indirectly signaled its increased pressure on China. FinCEN and the Office of Foreign Assets Control (OFAC) will likely directly target China in the near future.

Agricultural Bank of China

DFS announced that the Agricultural Bank of China, that country’s third largest bank, entered into a Consent Order to resolve violations of New York law requirements involving its compliance program (3 N.Y.C.R.R. § 116.2), books and records (New York Banking Law § 200-c), and reports to the DFS Superintendent (3 N.Y.C.R.R. § 300.1). The bank agreed to pay $215 million and engage an independent monitor to  implement an effective compliance program and conduct an 18-month look-back into additional potential violations. The bank will likely pay significantly more than the initial $215 million required to maintain its New York banking license. Continue reading