October 11, 2018 / 7:09 AM / 11 days ago

Dubai-based Mashreqbank reaches $40 million settlement with New York regulator

DUBAI (Reuters) - Dubai-based Mashreqbank MASB.DU has agreed to pay $40 million to the New York State Department of Financial Services for breaches in its anti-money laundering controls and gaps in its U.S. sanctions compliance program, the bank and the regulator said.

The regulator found Mashreq and its New York branch failed to maintain an effective and compliant anti-money laundering program, a consent order from the New York State Department of Financial Services said late on Wednesday.

It also found Mashreq and the New York branch failed to maintain and make available at the branch appropriate books, accounts and records of transactions detailing investigations into any possible U.S. sanction breaches.

The consent order did not specify any willful violation.

Mashreq confirmed the agreement in a statement and said it remained committed to maintaining and enhancing its compliance with regulatory expectations.

The department said it gave substantial weight to the conduct of Mashreq in demonstrating a keen interest in and commitment to resolving the issues addressed in the consent order, including by devoting substantial financial and corporate resources to enhancing the compliance function at the New York branch and in building an effective compliance infrastructure.

The New York branch, which provides correspondent banking and trade finance services, has assets totaling about $1.1 billion and has operated in New York since 1989, the consent order said.

Reporting by Tom Arnold; Editing by Edmund Blair

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