US regulatory expectations - including those from the Federal Financial Institutions Examination Council (FFIEC) - hold that an anti-money laundering (AML) and sanctions compliance program that does not have an adequate governance framework is de facto deficient regardless of other aspects (e.g., controls).
This has particularly been an issue for foreign banking organizations (FBOs), which have struggled to meet US regulatory expectations for AML governance. In the last five years in New York alone, 33 out of 50 AML enforcement actions cited inadequate governance as a deficiency - and over half of these firms were FBOs.
This problem is particularly centered around Asian FBOs as many European firms strengthened their programs as a result of intense scrutiny and heavy enforcement in the past. As a result, the enforcement focus has shifted to Asia, and while many firms have made significant enhancements to their overall AML and sanctions compliance programs, they continue to struggle with their governance and oversight of these programs.
This Financial Crimes Observer provides an overview of how Asian FBOs can build and sustain their governance programs as well as insights on why Asian FIs are still facing challenges in implementing an AML and sanctions governance framework.
Financial Services Leader, PwC US
Global Financial Crimes Leader, PwC US
Financial Crimes Unit, AML Leader, PwC US