US fines Bank of America $۱.۲bn for money laundering, sanctions violations

The second-largest US bank faces record penalties for failing to comply with sanctions and money laundering laws.

The US Treasury Department has imposed more than $۱.۲۱ billion in penalties against Bank of America, the second-largest bank in the US, for violating anti-money laundering and sanctions laws.

The fines announced on Tuesday include the third-largest penalty in the department’s history, the US Treasury said in a statement.

“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire US financial system to significant illicit finance risks,” US Treasury Secretary Scott Bessent said.

He added that these “actions send a clear message that even the biggest financial institutions are not above the law”.

Enforcement actions

According to the Treasury Department, the Financial Crimes Enforcement Network (FinCEN) assessed a $۱.۲ billion penalty over the bank’s failure to mitigate and report “priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border”.

The failures identified by FinCEN involved deficiencies related to the bank’s suspicious transaction identification and reporting and customer due diligence processes. According to the statement, “the Bank effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations”.

“Bank of America failed to timely report to FinCEN over $۵ billion dollars in suspicious transactions”, the Treasury said in the statement.

The Office of the Comptroller of the Currency (OCC) assessed a $۷۵۰ million fine, the largest in its history, for the bank’s deficient and ineffective anti-money laundering compliance programme. FinCEN’s $۱.۲ billion penalty includes credit for the OCC fine.

The Office of Foreign Assets Control (OFAC) also announced an $۱۱.۶ million settlement agreement over apparent violations of numerous sanctions programmes, including on Iran, Russia, narcotics and global terrorism.

Bank of America agreed to settle ۴۷۵ apparent violations of multiple sanctions programmes, and the settlement includes “significant compliance commitments regarding training, testing and audit, and future communication and cooperation with OFAC”.

In the statement, the Treasury said the actions “underscore the importance of effectively complying” with US anti-money laundering and sanctions requirements.

In response, Bank of America said in a statement: “Financial crime compliance is serious, and we are responsible for getting it right.”

“We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators.”