Banco do Brasil is penalized by
japanese regulators
Banco do Brasil SA, Latin America's largest bank, was ordered to halt all new foreign currency remittances for corporate customers in Japan for one year after regulators found it failed to report transactions that may have involved criminal funds.
All seven Japanese offices of the Brasilia-based bank also failed to confirm the identity of clients, the Financial Services Agency said in a statement in Tokyo.
he bank also failed to report rule breaches by its staff, including embezzling deposits and the forgery of signatures to access funds, the agency said.
The seven offices, including the Tokyo branch, must halt new transactions from Dec. 24, the agency said. Regulators will consider a request to restart the business after Dec. 26, 2005, based on how the lender has improved compliance, it said.The bank also helped foreigners in Japan transfer money through unregistered money lenders.
Shares of Banco do Brasil fell 1.3 percent to 32.42 reais ($11.86) in Sao Paulo.Banco do Brasil, which started business in Japan in 1972, had 195 employees in the country as of March 31, according to a regulatory official who declined to be identified.
Its seven offices make it the second-largest foreign bank in Japan in terms of branches after U.S.-based Citigroup Inc.Banco do Brasil is working to reinforce its regulatory controls in Japan, Augusto Brauna Pinheiro, director of Banco do Brasil's international department, said in a telephone interview from Sao Paulo."We are strengthening our internal controls and compliance activities in our operations in Japan," Brauna said.
In 2004, the amount of remittances from Japan to Brazil through the bank may reach $900 million, Brauna said. Banco do Brasil has 110,000 retail customers in Japan.
(From Bloomberg, Dezembro 16, 2004)
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