June 14, 2012 / 3:16 PM / in 6 years

Commerzbank had anti-money laundering lapses: Fed

WASHINGTON (Reuters) - The Federal Reserve said on Thursday the U.S. branch of German bank Commerzbank AG (CBKG.DE) had lapses in its anti-money laundering systems that are supposed to prevent the flow of shadowy funds through the U.S. financial system.

The Fed and the bank have entered into an agreement requiring the Commerzbank to take steps to clean up its anti-money laundering programs. The Fed did not fine the bank for the shortcomings.

The Fed said that the problems with the bank’s anti-laundering programs occurred in the bulk cash transactions business run out of its New York branch. Customers can use this type of business line to move large amounts of cash through the banking system in a way that can be hard for the government to trace.

    As part of the agreement with the Fed, Commerzbank will have to submit within 60 days a plan for how it will better comply with anti-money laundering laws. This will include more staff training and improvements to how it performs its “due diligence” on customers.

    The bank will also have to hire an independent consultant to review transactions made through its bulk cash transaction business from September 1, 2010 to the present for any suspicious activity.

    “Commerzbank has committed to take all necessary measures to comply with the additional compliance and reporting requirements agreed with U.S. regulators,” Commerzbank said in an emailed statement.

    Reporting By Mark Felsenthal and Dave Clarke; Editing by Marguerita Choy and Tim Dobbyn

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