Korea-based NongHyup Bank, which has been pulled up by financial authorities for negligence of anti-money laundering compliance by its New York branch, is currently sorting out the issue to avoid fines, a company official said on Nov. 15.
“Since the review conducted by the New York Federal Reserve Bank and State Department of Financial Services earlier this year, we’re trying our best to improve our compliance and management oversights in many aspects as promised,” a NongHyup Bank official told The Investor, declining to be identified. “We’re also negotiating with DFS on the amount of fines.”
In January this year, the New York financial authorities inspected the operations of Nonghyup’s local branch and identified deficiencies relating to risk management and compliance as applicable under federal and state regulations relating to anti-money laundering compliance.
Following this NongHyup promised to strengthen its compliance and management oversights.
However, the DFS has decided to impose fines which could top 10 billion won (US$89 million), according to a local media report.
If penalties are levied, this would mark the first-ever such case for a Korean bank.
“This is part of the broader inspection of Asian banks based in New York,” said another source familiar with the matter. “Other Korean banks could also face a similar situation.”
With 17 staff, NongHyup’s New York branch generates 5 billion won in revenue on average every year.
By Park Ga-young (firstname.lastname@example.org