FINMA JP Morgan AML Censure

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.