On Dec. 21, FINMA censured JP Morgan for AML failing re 1MDB.
- JPM seriously breached AML rules by not screening 1MDB transaction, relationship.
Alleged Violations
- Bank did not screen transactions and business relationships booked in Switzerland.
- Swiss breach associated with Malaysian sovereign wealth fund, 1MDB.
- FINMA proceedings in 2016-17, uncovered serious shortcomings with AML controls.
- JPM had inadequate controls to identify increased AML risks, for some businesses.
- Clients identified as politically exposed persons (PEP) were not managed properly.
- Accepted incomplete or unreliable information without examining or documenting.
- Ignored risk alerts or accepted client information without any further clarification.
- Did not identify AML cash flow risk between client business and personal accounts.
JPM Sanctions
- FINMA will conduct in-depth review of the bank's anti-money laundering systems.
- Monitor appointed for on-site review of controls and monitor on an ongoing basis.
- US regulator OCC with overall responsibility for JPMorgan has also been informed.
Other FINMA Sanctions re 1MDB
- JPM case one in a total of seven such cases brought by FINMA in relation to 1MDB.
- Unlike other proceedings re 1MDB, FINMA decided not to initiate JPM enforcement.
- No monetary penalties or business restrictions, have been imposed on J.P. Morgan.
- Follows FINMA Feb. 2017 order that Coutts disgorge CHF 6.5mn profit.
