24 February 2018
visit www.nextgenbanking.co.uk/

Japanese regulator slams Citi AML systems

26 June 2009  |  9754 views  |  1 citi bank

Japan's financial regulator has ordered Citi to stop sales operations at its retail division for a month after the banking giant failed to improve poor anti-money laundering systems.

The Financial Services Agency says there are "fundamental problems" with Citi's compliance and governance system, which is inadequate for monitoring suspicious transactions.

The FSA has publicly upbraided Citi in the belief that the US bank failed to catch and report money-laundering by a Japanese yakuza criminal syndicate.

The watchdog says Citi has not sufficiently carried out a business improvement order it was given in 2004, when it was told to shut down its private banking arm for similar failings.

The FSA says "control systems necessary for the detection, monitoring, and follow-up of suspicious transactions have not been developed" and that "despite the fact that it mainly relies on screening based on the database, input data is extremely limited; in addition, the database has not been updated since 2004".

The regulator also slammed Citi's management in the country, accusing it of a "lack an understanding of the rules applied in Japan".

Despite establishing an internal audit department, the bank has not accurately identified a series of problems.

The bank has now been told to submit business improvement plans by 31 July which should be executed immediately, with a progress update provided on every three months.

In a statement, the bank says: "Citibank Japan takes this administrative action very seriously and would like to express our sincere apology to our customers and other parties concerned. Citibank Japan is committed to implement all necessary measures to prevent any future occurrence of the problems identified."

Citibank Japan operates in 35 locations and two Internet-only branches throughout the country.

The FSA rap comes just days after it emerged Citi has suspended loan applications at its correspondent division in the US after a review found some property appraisals and income-verification documents were missing.

Comments: (1)

Stanley Epstein
Stanley Epstein - Citadel Advantage Ltd - Modiin | 27 June, 2009, 09:37

Now, why am I not surprised about this? Given the previous problem, what has the bank's management been doing these past several years?

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Citi in talks to sell IT assets - Economic Times

Citi in talks to sell IT assets - Economic Times

23 June 2009  |  7246 views  |  0 comments
Citi ramps up IT integration project - FT

Citi ramps up IT integration project - FT

22 May 2009  |  7454 views  |  0 comments
Citi looking to sell Japanese online broker - reports

Citi looking to sell Japanese online broker - reports

06 March 2009  |  4332 views  |  0 comments
Citi trader pleads guilty to bogus dealing

Citi trader pleads guilty to bogus dealing

28 September 2006  |  6677 views  |  0 comments
Japanese regulator slams Citibank for tech glitch

Japanese regulator slams Citibank for tech glitch

14 July 2006  |  8551 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Register for the webinarVisit https://www.capgemini.comvisit www.ebaday.com

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
11789 views comments | 16 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10325 views 3 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
8565 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
8088 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
7772 views comments | 10 tweets | 14 linkedin

Featured job

Competitive base + commission + benefits
London, UK

Find your next job