The FRB issued an approval order (the “Order”) of the application of Industrial and Commercial Bank of China Limited (“ICBC”), China Investment Corporation and Central Huijin Investment Ltd., all of Beijing, China, to become U.S. bank holding companies by acquiring up to 80% of the voting stock of The Bank of East Asia (U.S.A.) National Association, of New York City, which engages in retail and commercial banking in the U.S. through the operation of 13 branches in New York and California. ICBC is the largest bank in China, and the government of China owns approximately 70% of ICBC. In the Order (and as bases for its approval), the FRB concluded, among other things, that ICBC’s Chinese home regulatory supervisors subjected ICBC “to comprehensive supervision on a consolidated basis…” and that ICBC’s anti-money laundering compliance (“AML”) efforts and Chinese laws and regulations addressing AML issues, as well as supervision of AML compliance by Chinese regulatory agencies, are consistent with the FRB’s approval of the application. Prior to the FRB’s issuance of the Order, the FRB’s approvals of applications by Chinese banks had been limited to approvals of applications to establish a branch in the U.S. where the FRB was not required to make a determination that China subjected the applicant bank to comprehensive supervision on a consolidated basis.
Alert May 15, 2012