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Officials complain about NY’s strong standards

This is the second in a series looking at whether Korean lenders are properly dealing with anti-money laundering issues in time with the visit to Korea of the Financial Action Task Force this month. _ ED.

It seems that NH Bank CEO Lee Dae-hoon is pulling out all the stops to persuade the United States that the Seoul-based lender has substantially improved its dealing with anti-money laundering (AML) issues.

Lee visited the Federal Reserve Board and Department of Financial Services (DFS) to explain measures implemented by the bank, as the two sides are keeping an eye on NH whose New York branch faced an $11 million fine in 2017 for negligence in AML compliance.

Toward that end, he also visited the U.S. last month just after the DFS finished a six-week biennial audit and inspection. In addition, NH substantially increased the number of employees in charge of AML compliance.

From the perspective of the NH CEO, he may strive to shun the infamy that would be attributed to the large-sized lender if it failed to obey AML regulations.

In particular, the Seoul-based bank might be subject to on-the-spot investigations by the Financial Action Task Force, an inter-governmental body whose officials will visit Korea this month to check on the country’s compliance with AML rules.

However, NH officials appear to be too complacent regarding AML issues. HN is otherwise known as Nonghyup.

When the DFS audit of the New York branch was underway in April, they showed strong complaints against the department, which is responsible for regulating financial services and products.

They argued that the DFS was asking too much of such a small operation.

As far as we know, there were no attempts for launder money through our New York branch. The DFS is requiring us to complete a very complicated system to check on possible money laundering attempts,” an NH Bank official said at the time.

We did whatever we were told to do. Then the DFS required more,” he added.

It remains to be seen what the DFS will conclude after its six-week audit.

However, one thing that is for sure is that the NH officials – not its CEO – have the obligation to change their attitudes toward the hot-button issue at a time when FATF officials are visiting Seoul.

 

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