American Express processed around US$13bn in transactions believed to relate to trade-based money laundering (TBML), US federal authorities have revealed, following a major enforcement action against the company.
The US Federal Reserve Board and Office of the Comptroller of the Currency (OCC), which sits within the US Treasury and enforces money laundering legislation in the financial sector, jointly said on October 8 they had issued a US$350mn civil money penalty against American Express National Bank, a Utah-based subsidiary of the credit card company.
The OCC said that the suspected TBML activity was due to failings in American Express’ risk management, transaction monitoring and compliance controls over an 11-year period. In some cases, it said accounts were associated with bank insiders.
“The OCC expects banks of American Express’ size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security,” said comptroller Jonathan Gould.
Stephen Squeri, chairman and chief executive of American Express, said in a statement the company is “fully committed” to addressing the authorities’ concerns and has already conducted internal and external reviews into potential areas for improvement.
“We also investigated transactions that we identified being processed over our network by individuals misusing our products for the purchases of goods and services, reported that information to law enforcement, and took other appropriate action,” Squeri said.
He said the company has strengthened controls, improved training and deployed technology to respond to financial crime risks, though added “there is more work to do”.
US authorities did not give details of the transactions believed to relate to TBML, but said some related to suspicious card charges and associated repayments.
Though American Express periodically reported suspicious activity, it lacked the internal controls and monitoring capabilities to identify this activity quickly and report its full scope, the OCC said.
The violations “were part of a pattern of misconduct and caused more than a minimal loss to the bank”, it added.
As part of the order against American Express, authorities said the institution has to appoint a compliance committee to oversee improvements and file regular reports to the board.
Improvements should be made across customer due diligence, risk assessment, suspicious activity reporting, staffing, training and testing, the OCC said.
American Express’ Squeri said a portion of the US$350mn penalty had already been set aside. The action does not impact its full-year guidance for 2026 and is not expected to affect next year’s results either, he said.
