Citigroup told to improve money laundering controls

Washington, March 27: The Federal Reserve has ordered Citigroup to strengthen its controls against money-laundering, pointing to problems in subsidiaries including the US unit of Citi’s Mexican bank, Banamex.

In a consent order released by the Fed and signed by the bank, Citigroup pledged to take extensive actions to better comply with the US Bank Secrecy Act on preventing money-laundering.

The consent order—an undertaking by Citi to comply with various steps laid out by the Fed—did not provide any details on what problems were unearthed by regulators.

But it said Citigroup “lacked effective systems of governance and internal controls to adequately oversee the activities” of the subsidiaries with respect to the BSA and anti-money laundering rules.

The apparent problems involved Citigroup’s key operating subsidiary Citibank, and Banamex USA, the US arm of leading Mexican bank Banco Nacional de Mexico, also controlled by Citigroup.

They also involved other group subsidiaries in international banking.

The consent order lays out a detailed schedule of actions Citigroup and the subsidiaries must take to tighten its compliance, and reporting requirements on those actions.

The order came without any prior testimony or legal hearings or findings, and said it did not constitute an admission or denial by Citigroup of any allegation that had come before the Fed.

Source: the Hindu Business Line