WASHINGTON, April 4 The local branch of
Germany's HSH Nordbank AG will improve its anti-money
laundering controls under an agreement with regulators released
by the U.S. Federal Reserve on Thursday.
The Fed and the New York State Department of Financial
Services entered into a settlement with HSH Nordbank's New York
branch that requires the bank to address problems with its
anti-money laundering compliance and requirements to report
suspicious customer activity.
The settlement comes as regulators step up efforts to better
police for illicit money flows. The Fed ordered Citigroup Inc
last week to improve its own compliance processes.
"We will continue to be vigilant in our efforts to
strengthen safeguards against money laundering across the
financial system," Benjamin Lawsky, who heads New York's
financial services department, said in a statement.
In a statement, the bank said it and its New York branch
meet German anti-money laundering requirements, but that its New
York branch does not fully meet U.S. rules.
"HSH is fully aware of the importance of the U.S.
requirements and has pledged to do all necessary reworks," the
bank said. The bank also said regulators did not object to any
specific customers or transactions.
Under the agreement, HSH Nordbank has 30 days to hire an
independent consultant to review the New York branch's
compliance with anti-money laundering laws.
The review is expected to include as assessment of the
bank's policies and procedures, the duties and authority of its
compliance officers, and a review of its policies for
identifying and reporting suspicious activity.
After the review, the consultant is expected to help the
bank develop and implement new policies, according to the
Sixty days after, the bank must submit a report detailing
the findings of the review and submit several improvement plans,
including one to improve management oversight of its compliance
The new settlement stems from examinations the Federal
Reserve and the New York banking and insurance regulator
conducted in 2010 and 2011 that found continuing problems with
the bank's anti-money laundering procedures, a person familiar
with the reviews said.