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FDIC Enforcement Decisions and Orders

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   [11,338A] In the Matter of National Bank of Greece S.A., Boston, Massachusetts, Docket No. 96-118b (9-12-96).

   A cease and desist order was issued, based on findings by the FDIC that it had reason to believe that respondent had engaged in unsafe and unsound practices.

   [.1] Bank Secrecy Act—Compliancem

   [.2] Compliance Program—Minimum Requirements
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   [.3] Bank Secrecy Act—Officer, Designate

   [.4] Bank Secrecy Act—Written Policy Required

In the Matter of

NATIONAL BANK OF GREECE S.A.ATHENS, GREECE
NATIONAL BANK OF GREECE S.A.BOSTON BRANCH
BOSTON, MASSACHUSETTS

DOCKET NO. 96-007-B-FB 96-007B-FBR
and

FDIC-96-118b

CEASE AND DESIST ORDER ISSUED UPON CONSENT

   WHEREAS, in recognition of their common goal to ensure compliance by the National Bank of Greece, Athens, Greece ("NBG") and its Boston, Massachusetts branch (the "Boston Branch") with all applicable federal and state laws, rules, and regulations relating to the reporting of transactions involving currency, including the Currency and Foreign Transactions Reporting Act (31 U.S.C. 5311 et seg.) and the accompanying regulations issued by the U.S. Department of the Treasury (31 C.F.R. 103.11 et seg.) (collectively referred to as the Bank Secrecy Act (the "BSA")), and to ensure proper implementation by the Boston Branch of internal compliance procedures designed to achieve, among other things, adequate processing of cash transactions, maintenance of adequate records relating to cash transactions, and the reporting of suspicious transactions to the appropriate law enforcement agencies, the Board of Governors of the Federal Reserve System (the "Board of Governors"), the Federal Deposit Insurance Corporation (the "FDIC"), the Commissioner of Banks for the Commonwealth of Massachusetts (the "Commissioner"). NBG and the Boston Branch have mutually agreed to enter into this consent Cease and Desist Order (the "Order"), and

   WHEREAS, on July 31st, 1996, the board of directors of NBG adopted a resolution (1) authorizing and directing Theodoras B. Karateas, the Governor, to enter into this Order on behalf of NBG, and consenting by the board of directors of NBG, the Boston Branch and NBG's institution-affiliated parties, as defined in sections 3(u) and 8(b)(4) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1813(u) and 1818(b)(4), to comply with each and every provision of this Order; and (2) waiving any and all rights that NBG and the Boston Branch may have pursuant to 12 U.S.C. 1818, 12 C.F.R. Parts 263 and 309, and Massachusetts General Laws, Chapter 167, Section 3 to: (a) the issuance of a notice of charges and of hearing on any matter set forth in this Order; (b) a hearing for the purpose of taking evidence on any matters set forth in this Order; (c) waiving any and all rights to judicial review of this Order; and (d) waiving any and all rights to challenge or contest, in any manner, the basis, issuance, validity, terms, effectiveness or enforceability of this Order or any provision hereof; and on August 6, 1996, Robert J. Tolesner, General Manager of the Boston Branch, agreed to the foregoing on behalf of the Boston Branch.

   NOW THEREFORE, before the taking of any testimony or adjudication of, or finding on any issue of fact or law herein, and without this Order constituting an admission of any allegation made or implied by the Board of Governors, the FDIC, or the Commissioner in connection with this proceeding, and solely for the purpose of settlement of this proceeding without protracted or extended hearing or testimony and pursuant to the aforesaid resolution:

   IT IS HEREBY ORDERED that NBG, the Boston Branch, and their institution-affiliated parties cease and desist and take affirmative action as follows:

   [.1] 1. (a) NBG, the Boston Branch, and any institution-affiliated party thereof, shall not, directly or indirectly, violate the BSA.

   (b) For the purposes of this Order, the term "violate" includes any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling or aiding or abetting a violation.

   [.2] 2. To ensure that NBG and the Boston Branch comply with all of the provisions of the BSA, the Boston Branch shall, and NBG shall take all actions necessary to ensure that the Boston Branch shall, implement and comply fully with the internal compliance program of the Boston Branch approved by the Federal Reserve Bank of Boston (the "Reserve Bank"), the FDIC and the Commissioner, as of November 3, 1994, that is designed to:
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       (a) Provide the means by which to detect and monitor currency transactions over $10,000 occurring at the Boston Branch to ensure that such transactions are not being conducted for illegitimate purposes and that there is full compliance with all applicable laws and regulations relative to such large currency transactions;

       (b) provide the means by which to detect and monitor all other currency transactions occurring at the Boston Branch to ensure that such transactions are not being conducted for illegitimate purposes and there is full compliance with all applicable laws and regulations relative to such other currency transactions;

       (c) provide effective training to all appropriate personnel at the Boston Branch, including, but not limited to, tellers, customer service representatives, lending officers, private and personal banking officers and all other customer contact personnel, in all aspects of regulatory and internal policies and procedures related to the BSA and update the training provided on a regular basis to ensure that all personnel are provided with the most current and up to date information;

       (d) provide for an internal review process within the Boston Branch to ensure that the Boston Branch is complying with all applicable rules and regulations related to the BSA, that appropriate personnel possess the requisite knowledge necessary to comply with all applicable rules and regulations related to the BSA, that all procedures are in writing and that such procedures are complete and accurate and that the results of the internal review are reported to senior management at NBG and its Boston Branch and that senior management institute appropriate actions to resolve any reported deficiencies; and

       (e) provide for independent testing of compliance with all applicable rules and regulations related to the BSA to be conducted by qualified, trained and experienced third parties, such as independent public accountants or specialists in this subject matter, who are not, in any manner, affiliated with NBG or the Boston Branch or any of NBG's subsidiaries or affiliates.

   3. To further ensure that NBG and the Boston Branch comply fully with all the provisions of the BSA and to ensure that NBG and the Boston Branch effectively control and monitor the flow of funds to and from the Boston Branch to persons and entities within and outside of the United States, NBG and the Boston Branch shall:

       (a) Take all actions necessary to ensure that the Boston Branch implements and complies fully with the "know your customer policy" approved by the Reserve Bank, the FDIC and the Commissioner, as of October 28, 1994, that will enable the Boston Branch to:

         (i) Identify and confirm the identity of each of the customers of the Boston Branch;

         (ii) predict with relative certainty the types of transactions that each of the customers of the Boston Branch is likely to transact with the branch;

         (iii) monitor the transactions of each of the customers of the Boston Branch to determine if each transaction that occurs is inconsistent with the customer's regular and ordinary practices; and

         (iv) investigate further, and, where necessary, prohibit transactions involving customers whose identities or business activities cannot be sufficiently confirmed or whose transactions are inconsistent with that customer's normal practices and no satisfactory explanation exists.

    (b) Within 45 days of this Order, submit to the Reserve Bank, the FDIC and the Commissioner, an acceptable written plan designed to:

         (i) Ensure compliance with the recordkeeping and reporting requirements for currency transactions over $10,000 (31 C.F.R. 103.22);

         (ii) ensure compliance with the identification requirements related to the recordkeeping and reporting requirements for currency transaction report over $10,000 (31 C.F.R. 103.28);

         (iii) ensure compliance with the recordkeeping and reporting requirements for financial accounts maintained in a foreign country (31 C.F.R. 103.24);

         (iv) ensure compliance with the recordkeeping requirements for the purchase of bank checks and drafts, cashier's checks, money orders and traveler's checks (31 C.F.R. 103.29);

         (v) ensure compliance with the requirements related to the nature of records to
      {{10-31-00 p.C-4256.2}} be maintained and the retention period (31 C.F.R. 103.38); and

         (vi) ensure the identification and timely, accurate and complete reporting, to law enforcement and supervisory authorities, of known or suspected criminal activity perpetrated against or involving the Boston Branch, consistent with all applicable federal and state laws, rules, regulations and guidelines, including Regulation H (12 C.F.R. 208.20) and Regulation K (12 C.F.R. 211.8 and 211.24).

   4. The policy and plan referred to in paragraphs 3(a) and 3(b) hereof, shall include or continue to include, at a minimum, internal review procedures consistent with the BSA compliance program in paragraph 2 hereof.

   [.3] 5. The Boston Branch shall, and NBG shall take all actions necessary to ensure that the Boston Branch shall, employ a qualified officer, acceptable to the Reserve Bank, the FDIC, and the Commissioner, who will have responsibility for all the BSA compliance and related matters, including, but not limited to, the identification and reporting of known or suspected criminal violations and suspicious activity.

   6. During the term of this Order, the approved program and policy described in paragraphs 2 and 3(a) hereof, shall not be amended or rescinded without the prior written approval of the Reserve Bank, the FDIC's Boston Regional Office and the Commissioner.

   [.4] 7. The written plan required by paragraph 3(b) hereof shall be submitted to the Reserve Bank, the FDIC and the Commissioner for review and approval. An acceptable plan shall be submitted to the Reserve Bank, the FDIC and the Commissioner within the time period set forth in paragraph 3(b) of this Order. NBG and the Branch shall submit the plan no later than 20 days prior to the expiration of the time period set forth in paragraph 3(b). The Reserve Bank, the FDIC and the Commissioner may comment on the plan within 10 days of receipt. NBG and the Boston Branch shall provide the Reserve Bank, the FDIC and the Commissioner with a revised plan, as may be required, within five days of receipt of written comments, if any within five days of receipt of the revised plan, the Reserve Bank, the FDIC and the Commissioner shall communicate in writing their approval or disapproval. NBG and the Branch shall adopt the approved plan within 10 days of approval by the Reserve Bank and then shall fully comply with it. During the term of this Order, the approved plan shall not be amended or rescinded without the prior written approval of the Reserve Bank, the FDIC and the Commissioner.

   8. Within 30 days after the end of each calendar quarter (September 30, December 31, March 31 and June 30) following the date of this Order, NBG and the Boston Branch shall furnish to the Reserve Bank, the FDIC Boston Regional Office, and the Commissioner joint written progress reports detailing the form and manner of all actions taken to secure compliance with this Order, and the results thereof.

   9. All communications regarding this Order shall be sent to:

       (a) E. Philip A. Simpson,
    Jr.Vice PresidentFederal
    Reserve Bank of Boston
    600 Atlantic Avenue
    Boston, Massachusetts 02106

       (b) Patrick J. Rohan
    Regional Director
    Federal Deposit Insurance Corporation
    Boston Regional Office
    200 Lowderbrook Drive, Suite 3100
    Westwood, Massachusetts 02090

       (c) Thomas J. CurryCommissioner of
    BanksCommonwealth of Massachusetts
    100 Cambridge Street
    Boston, Massachusetts 02202

       (d) Theodoros Karatzas
    Governor
    National Bank of Greece
    Cotzia Square
    Athens 121 Greece

       (e) Robert J. Tolomer
    General Manager
    National Bank of Greece, Boston Branch
    33 State Street
    Boston, Massachusetts 02109

   10. The provisions of this Order shall be binding on NBG and the Boston Branch and each of their institution affiliated parties in their capacities as such, and their SUCCESSORS and assigns.

   11. (a) Each provision of this Order shall remain effective and enforceable until stayed, modified, terminated, or suspended by the Board of Governors, the FDIC, and the Commissioner.

   (b) The Written Agreement, dated August 18, 1994, between the Bank, the Boston Branch, the National Bank of Greece, Chicago Branch, the Federal Reserve Banks of
{{10-31-00 p.C-4256.3}}Boston,. New York and Chicago, the FDIC, and the Commissioner remains fully effective and enforceable.

   12. Notwithstanding any provision of this Order, the Reserve Bank, the FDIC Boston Regional Office, and the Commissioner, may, in their discretion, grant written extensions of time to NBG and the Boston Branch to comply with any provision of this Order.

   13. The provisions of this Order shall not bar, estop or otherwise prevent the Board of Governors, the FDIC, the Commissioner, or any federal or state agency or department from taking any other action affecting NBG, the Boston Branch, or any of their current or former institution-affiliated parties.

   IN WITNESS HEREOF, the parties have caused this Order to be issued as of the 12th day of September, 1996.

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