HSH Nordbank in settlement on money-laundering checks

Thu Apr 4, 2013 4:36pm EDT
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WASHINGTON (Reuters) - The local branch of Germany's HSH Nordbank AG HSH.UL will improve its anti-money laundering controls under an agreement with regulators released by the Federal Reserve on Thursday.

The Fed and the New York State Department of Financial Services entered into a settlement with HSH Nordbank's New York branch that requires the bank to address problems with its anti-money laundering compliance and requirements to report suspicious customer activity.

The settlement comes as regulators step up efforts to better police for illicit money flows. The Fed ordered Citigroup Inc (C.N: Quote) last week to improve its own compliance processes.

"We will continue to be vigilant in our efforts to strengthen safeguards against money laundering across the financial system," Benjamin Lawsky, who heads New York's financial services department, said in a statement.

In a statement, the bank said it and its New York branch meet German anti-money laundering requirements, but that its New York branch does not fully meet U.S. rules.

"HSH is fully aware of the importance of the U.S. requirements and has pledged to do all necessary reworks," the bank said. The bank also said regulators did not object to any specific customers or transactions.

Under the agreement, HSH Nordbank has 30 days to hire an independent consultant to review the New York branch's compliance with anti-money laundering laws.

The review is expected to include as assessment of the bank's policies and procedures, the duties and authority of its compliance officers, and a review of its policies for identifying and reporting suspicious activity.

After the review, the consultant is expected to help the bank develop and implement new policies, according to the settlement.   Continued...

The HSH Nordbank logo is pictured in Hamburg December 7, 2012. REUTERS/Fabian Bimmer