WASHINGTON / TOKYO, 9 September 2025 — The U.S. Federal Reserve Board officially ended its enforcement action against Sumitomo Mitsui Banking Corporation (SMBC) and its New York branch, marking the successful resolution of a six-year regulatory compliance process. This enforcement action—initially imposed in April 2019 due to weaknesses in anti-money laundering (AML) controls—was formally terminated on 4 September 2025, as confirmed by a Federal Reserve press release.
At the heart of the matter was the New York branch’s breach of the Bank Secrecy Act (BSA) regulations. SMBC entered into a consent agreement, mandating comprehensive enhancements to its AML framework and control systems across correspondent banking and funds transfer operations. The bank responded by instituting global improvements through its Three Lines of Defense model—centralising governance, risk oversight, and compliance to meet G-SIB standards.
The Fed’s move to withdraw the enforcement action signals that SMBC has sufficiently addressed these deficiencies, reinforcing its compliance credibility in U.S. financial markets.
What This Means for ASEAN and Global Banking
For Malaysian and Southeast Asian stakeholders, the Fed’s action underscores the importance of robust AML governance for institutions operating across borders. SMBC’s success in resolving the matter highlights how emerging-market banks can navigate complex regulatory landscapes while maintaining access to global financial systems.
Moreover, the conclusion of this enforcement process may unlock new opportunities for SMBC to expand its footprint in the United States—potentially advancing lending, trade finance, and cross-border capital flows through its New York branch.
