Sumitomo Mitsui Ordered to Fix Money-Laundering Controls in U.S.

(Bloomberg) -- Sumitomo Mitsui Financial Group Inc.’s banking unit was ordered by the U.S. Federal Reserve to fix weaknesses in its protections against money laundering.

Fed supervisors found “deficiencies” in Sumitomo Mitsui Banking Corp.’s anti-money laundering systems, the regulator said in an order dated April 23. The Fed said the weak controls were detected at a New York branch that’s under its supervision.

While the enforcement action excludes any monetary penalty, the authority gave Sumitomo Mitsui a list of tasks and deadlines for fixing controls. Japan’s second-largest lender by market faced a similar order from the Federal Reserve Bank of New York in 2007.

The Japanese bank said it is “fully committed to complying with all of the terms set forth in the written agreement.” It has already taken actions to improve compliance with U.S. anti money laundering requirements, the lender said in a statement.

Sumitomo Mitsui is the second major Japanese bank to be warned over anti-money laundering lapses in the U.S. recently. Mitsubishi UFJ Financial Group Inc. was ordered to fix deficiencies in its compliance by the Office of the Comptroller of the Currency in February.

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