"Breaking the Bank: Metrobank Slapped with AML Fines"

BRIEF INTRO:In 2006, the Metropolitan Bank & Trust Company (Metrobank), New York Branch, a subsidiary of the largest bank in the Philippines, faced severe consequences for failing to comply with the Bank Secrecy Act.

WHAT WENT WRONG?

The Financial Crimes Enforcement Network (FinCEN) discovered that Metrobank had significant deficiencies in its anti-money laundering (AML) program. Key issues included inadequate internal controls, insufficient independent testing, and failure to file timely suspicious activity reports (SARs). These lapses were identified during an examination by the Office of the Comptroller of the Currency (OCC).

Key Findings:

- Inadequate AML Program: Metrobank's AML policies and procedures were insufficient, particularly in managing risks associated with high-risk transactions like pouch and payable upon proper identification activities.

- Lack of Customer Due Diligence: The bank failed to collect adequate information for customer profiling and risk assessment.

- Ineffective Monitoring Systems: Despite having transaction monitoring software, Metrobank relied on manual processes, leading to delayed detection of suspicious activities.

- Delayed SARs Filing: From 1998 to July 2004, Metrobank filed only 34 SARs. Following the OCC review, it filed 198 SARs, many of which were significantly delayed.

As a result of these failures, FinCEN imposed a civil money penalty of $150,000 on Metrobank, which was concurrent with a similar penalty by the OCC.

LESSONS LEARNED:

Key learnings for other financial institutions:

1. Compliance Was Non-Negotiable

2. Timely Reporting Was Essential

3. *Customer Due Diligence Could Not Be Overlooked

4. Effective Use of Technology

5. Regular Audits and Reviews Were Necessary

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For more information, contact us at:

WhatsApp: 0301-1157150 / 51

Email: haris@fpmamlcheck.com