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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 ActCompliancem
[.2] Compliance ProgramMinimum Requirements
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[.3] Bank Secrecy ActOfficer, Designate
[.4] Bank Secrecy ActWritten 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.