In addition, the bank and branch appoint, within ten days, a representative responsible for coordinating and presenting all written plans and programs required by the terms of the agreement and submit quarterly report of progress in writing outs setting out all measures taken to ensure compliance with the provisions of this agreement. If circumstances warrant a less serious form of formal prudential action, a written agreement may be used. A written agreement can be reached either with the board of directors or with the reserve bank under delegated authority. The agreement may address one of the problems identified by the Bank or problems involving parties close to the institution. On April 23, 2019, the Federal Reserve Bank of New York (FRB-NY) entered into an agreement with the Bank`s Sumitomo Mitsui Banking Corporation (the Bank) and the Bank`s New York Branch (the branch) due to significant deficiencies in the Branch bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program. Sumitomo is a foreign bank based in Tokyo and operates a branch in New York, regulated by FRB-NY. The recent FRB-NY investigation revealed numerous flaws in all areas of the BSA/AML compliance program. The Federal Reserve Bank (FRB) of Philadelphia recently reached an agreement with a state-chartered bank for non-compliance with anti-money laundering (AML) provisions. Within 60 days of the agreement, the Bank must submit several written compliance plans and programs regarding board control and oversight, risk management and risk reduction, as well as internal controls and audits. One of these plans includes the Bank`s efforts to improve oversight of the board of directors and corporate governance. The plan (i) identifies, among other things, the steps the Bank`s Board of Directors will take to maintain effective control and control over the Bank`s compliance with the BSA/AML requirements and OFAC rules; and (ii) the steps the Bank will take to improve the audit committee`s control over compliance with these requirements and rules by the audit committee.
If a final order or temporary injunction is not complied with, the board of directors may ask a U.S. District Court to enforce the appeal. The court may order and demand respect. Violations of final orders and written agreements may also lead to the assessment of civil fines against the bank or party close to the institution, if circumstances warrant.