Financial Crime World

Puerto Rico’s Financial Institution Security Under Scrutiny After $15 Million Penalty Imposed on Bank

FinCEN Imposes $15 Million Civil Money Penalty on Bancrédito International Bank and Trust Corporation

The Financial Crimes Enforcement Network (FinCEN) has imposed a $15 million civil money penalty on Bancrédito International Bank and Trust Corporation, Puerto Rico’s oldest and largest international banking entity, for willful violations of the Bank Secrecy Act (BSA).

Violations of Bank Secrecy Act

According to FinCEN, the bank processed millions of dollars in suspicious transactions through the United States without proper due diligence and reporting. The institution failed to:

  • Timely report suspicious transactions
  • Establish a due diligence program for correspondent accounts
  • Implement an anti-money laundering (AML) program

Consequences of Non-Compliance

Bancrédito provided correspondent accounts to foreign financial institutions without required due diligence and reporting, said FinCEN Director Andrea Gacki. “With today’s action, we’re sending a strong message that the era of easy money laundering through Puerto Rican international banking entities is over.”

The bank admitted to willfully violating the BSA between 2015 and 2022 by failing to:

  • Report suspicious transactions
  • Establish a due diligence program for correspondent accounts
  • Implement an AML program

Additionally, the institution failed to comply with its SAR reporting obligations, ignoring violations cited by its primary regulator, the Puerto Rico Office of the Commissioner of Financial Institutions.

Significance of the Penalty

The penalty is significant, as it highlights the need for financial institutions in Puerto Rico to prioritize security and compliance. “This enforcement action demonstrates FinCEN’s commitment to ensuring that international banking entities operating in the United States comply with anti-money laundering regulations,” said Gacki.

Warning to Other Financial Institutions

The case serves as a warning to other financial institutions in Puerto Rico to ensure they are taking necessary measures to prevent money laundering and maintain transparency.