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Bank in anti-money laundering drive after ties to Kokang fighters revealed

A man walks past a branch of the Agricultural Bank of China in the town of Nansan, Yunnan province, China, on 12 March 2017. (Photo: Reuters)

Agricultural Bank of China (AgBank), the country’s third-biggest lender, said it will spend three years building an anti-money laundering (AML) centre to improve and centralise AML control, according to a statement circulated late on Thursday.

The move comes after US regulators fined the lender $215 million for inadequate compliance and days after Reuters revealed an AgBank account had been used by Burmese rebels to collect funds.

“Compliance management for anti-money laundering, counter-terrorist financing and sanctions-related work has become increasingly important for all countries around the world,” AgBank said in a press statement emailed late on Thursday.

AgBank suspended an account used to fund an ethnic armed group fighting government troops in Burma.

The suspension came after Reuters sent AgBank a list of questions about its transactions linked to the Myanmar National Democratic Alliance Army, which compliance experts said could point to weakness in financial controls aimed at stopping terrorism.

AgBank said it will spend three years building a team of AML professionals, a set of effective AML tools, and a complete AML internal control system to bring AgBank’s compliance management up to a “first-class level by international standards.”

The AML center will be the “hub and core” for AgBank’s AML strategy, planning and management for its headquarters and branches at home and abroad, the bank said.

AgBank Governor Zhao Huan said at a recent AML training session that employees should increase their monitoring of reports of suspicious transactions and fully implement the rules to “avoid touching the red line of international sanctions,” its statement said.