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Top Story Operations Related

03/18/2024

U.S. targets illicit shipments

On Friday, the Treasury Dapartment reported that OFAC had taken action against Marshall Islands-registered shipping company Vishnu Inc., whose vessel, the LADY SOFIA, is involved in illicit shipments to the People’s Republic of China in support of Iran’s Islamic Revolutionary Guard Corps-Qods Force and Houthi financial facilitator Sa’id al-Jamal, who is sanctioned under U.S. counterterrorism authorities.

For identification information on Vishnu Inc. and the LADY SOFIA, see Friday's BankersOnline OFAC Update.

03/18/2024

FinCEN ruling on CIP/CDD for charitable beneficiaries of IRA

On Friday, FinCEN published an administrative ruling regarding Customer Identification Program (CIP) and Customer Due Diligence (CDD) requirements for designated beneficiaries of individual retirement accounts.

In FIN-2024-R001, FinCEN issued a revised response to clarify obligations for broker-dealers that open new accounts for legal entity customers. The ruling was issued in response to a request from a foundation that had been named the beneficiary of an individual retirement account maintained by the broker-dealer. For the foundation to receive the funds, the broker-dealer required the foundation to open a new IRA and submit information required by the broker-dealer's CIP and CDD rules. The foundation asked whether it must comply with identification verification requirements when receiving the distribution of IRA funds inherited as part of a charitable estate.

In the ruling, FinCEN expressed no view on whether the broker-dealer had to open the IRA account to pass the funds to the foundation. It did, however, confirm that, in order to open an account, the broker-dealer would be required to comply with CIP and CDD rules imposed under FinCEN regulations.

03/15/2024

Swiss global banking group settles with OFAC

OFAC has announced a settlement with EFG International AG, a Switzerland-based global private banking group. EFG has agreed to pay $3,740,442 to settle its potential civil liability for processing 873 securities transactions in apparent violation of the Cuban Asset Control Regulations, the Kingpin Act, and Executive Order 14024. The settlement amount reflects OFAC’s determination that EFG’s apparent violations were voluntarily self-disclosed and were non-egregious. Further details are available in OFAC's enforcement release.

03/15/2024

Fed and OCC fine JPMorgan Chase $348.2M for inadequate monitoring

The Federal Reserve Board yesterday announced it has issued an enforcement action against JPMorgan Chase & Co., and fined the firm approximately $98.2 million for an inadequate program for monitoring firm and client trading activities for market misconduct. The Board's action requires JPMorgan Chase to review and take corrective action to address the firm's inadequate monitoring practices, which occurred between 2014 and 2023.

The Board's action was taken in coordination with the Office of the Comptroller of the Currency. The penalties announced by the Board and the Office of the Comptroller of the Currency total approximately $348.2 million.

The OCC's assessment of a $250 million civil money penalty against JPMorgan Chase Bank, N.A. was also announced yesterday. The OCC reported it found that the bank operated with gaps in trading venue coverage and without adequate data controls required to maintain an effective trade surveillance program.

Generally, trading venues are systems or electronic platforms, operated by investment firms or market operators, that bring together multiple third party buying or selling interests in financial instruments to perform a transaction. The OCC expects banks to perform trade surveillance to monitor the market conduct of its traders and clients as part of its market conduct risk control framework. The OCC found that the bank failed to surveil billions of instances of trading activity on at least 30 global trading venues. These gaps and deficiencies in the bank’s trade surveillance program constitute unsafe or unsound banking practices.

03/15/2024

FDIC Board to meet March 21

The FDIC has announced that its Board of Directors will meet at 10:00 a.m. EDT on March 21, 2024, to consider a memorandum and resolution regarding a proposed statement of policy on bank merger transactions.

The meeting will be open to the public via webcast.

03/14/2024

U.S. targets Republika Srpska officials

Yesterday, the Treasury Department reported that OFAC had designated three individuals who have contributed to Specially Designated National (SDN) and Republika Srpska President Milorad Dodik’s efforts to undermine the peace and stability of Bosnia and Herzegovina (BiH) by organizing and executing the commemoration of “Republika Srpska Day” on January 9, 2024, an activity determined to be unconstitutional in BiH. These individuals facilitated Dodik’s efforts to undermine the Dayton Peace Agreement and the authority of the BiH Constitutional Court and the High Representative.

For the names and identification information of the designated individuals, see yesterday's BankersOnline OFAC Update.

03/13/2024

U.S. targets Al-Ashtar Brigades operatives

The Treasury Department yesterday reported that OFAC has acted in coordination with the Kingdom of Bahrain against key Iran-based operatives and a financial facilitator for designated terrorist group Al-Ashtar Brigades. The Department of State designated Al-Ashtar Brigades as a Foreign Terrorist Organization and a Specially Designated Global Terrorist in 2018.

For the names and identification information of the designated individuals, see yesterday's BankersOnline OFAC Update.

03/13/2024

Hsu discusses operational resilience

The OCC has reported that Acting Comptroller Michael J. Hsu yesterday discussed the importance of operational resiliency in remarks at the Institute of International Bankers Annual Washington Conference.

In his remarks, Mr. Hsu discussed the growing risks of disruptions that may impede the provision of financial services or adversely impact systems. He also discussed considerations to strengthen operational resiliency requirements for large banks with critical operations, including third party service providers.

03/12/2024

Appeal filed in Corporate Transparency Act case

FinCEN has reported that the Government has filed a Notice of Appeal in National Small Business United v. Yellen. The appeal was filed with the U.S. Court of Appeals for the Eleventh Circuit.

03/12/2024

U.S. targets transnational al-Shabaab money laundering network

The Treasury Department has reported that OFAC has imposed sanctions on 16 entities and individuals who compose an expansive business network spanning the Horn of Africa, the United Arab Emirates (UAE), and Cyprus that raises and launders funds for al-Shabaab, a terrorist group affiliated with al-Qa’ida. Individuals within this network include influential businesspeople in the region that lend financial backing to al-Shabaab, a terrorist group responsible for some of the worst terrorist attacks in East Africa’s modern history. These attacks have claimed the lives of thousands of innocent civilians. These individuals and entities were designated pursuant to Executive Order 13224, as amended, which targets terrorist groups and their enablers.

For the names and identification information of the designated parties, see yesterday's BankersOnline OFAC Update.

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