Chapter 6: Sanctions and Corrective Measures to Be Taken by Competent Authorities
BOX 6.9
Sanction Proceedings in France following an On-Site Inspection (Continued )
sanction. The bank is asked to comment and an interview is held with the representatives of the bank and their counsel. The Commission bancaire decides, but not in the presence of the general secretariat, whether the case should be sanctioned and, if so, whether the decision should be made public. This is generally the case, however, when the facts are related to money laundering. • Although defendants frequently raise procedural issues, the courts generally confirm most decisions, especially when the facts relate to money laundering. Source: Bank of France, Secrétariat Général de la Commission bancaire.
5.2.2 Follow-up Procedures It is important that the supervisor closely follow up the inspectors’ recommendations to ensure that the bank corrects all the identified deficiencies. To this end, the supervisor must make systematic checks and hold frequent meetings with bank representatives to ascertain the concrete measures adopted and the degree of progress made towards compliance. It is critical that supervisors show vigilance in their oversight of the problems by periodically checking the bank’s progress in complying with the recommended measures. The supervisor can, for example, give the institution specific orders to comply with instructions, and can order regular reports from the institution that describe the measures it is taking to address the deficiencies in the AML/CFT internal apparatus. A review meeting will follow and, if necessary, there will be a new round of on-site inspections. If the problems escalate, or if bank management ignores more informal requests from supervisors to take corrective action,33 there should be a progressive escalation of action or remedial measures. In Malaysia, for instance, following an off- and on-site examination, Bank Negara Malaysia (BNM) provides banks with extensive feedback, as well as recommendations that address key AML/CFT deficiencies. Several meetings are organized with the bank’s board of directors, the board’s audit committee, and the bank’s senior management. Following a consultative process, the banks establish remediation programs subject to a stringent follow-up process by BNM. Banks must report their progress in addressing their deficiencies on a quarterly basis. If the information provided to BNM is not sufficient, further information is requested and, eventually, if necessary, there will be a follow-up on-site examination. In Singapore, the Monetary Authority of Singapore (MAS) examination report consists of two key parts. The first is a general description of AML/CFT risks and
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