The Federal Reserve has terminated a 10-year-old enforcement action against Citigroup that had required the banking giant to strengthen its anti-money laundering controls.

The central bank announced on Tuesday the end of the 2013 consent order, which had targeted deficiencies in the bank's compliance programmes. The original action, which did not include any financial penalties, had mandated Citigroup to enhance its safeguards following concerns raised by other regulatory bodies.

The enforcement action had specifically focused on Citigroup and its former Banamex unit, which is currently being prepared for separation from the bank's main operations. Citigroup announced plans in late 2023 to pursue an initial public offering for Banamex in the second half of 2024, as part of its strategy to exit the consumer banking market in Mexico.

Under the original order, Citigroup was required to implement comprehensive compliance risk management systems across its organisation. The bank's board of directors had agreed to submit detailed plans to the Federal Reserve regarding the enhancement of oversight procedures, including provisions for adequate staffing and technological resources.

A spokesperson for Citigroup declined to comment on the termination of the enforcement action. The original order had been initiated following allegations of deficiencies by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

The 2013 documentation noted that Citigroup had "adopted a firmwide compliance risk management program designed to identify and manage compliance risks across the consolidated organisation related to compliance with all applicable laws, rules, and regulations," though the bank neither admitted nor denied the allegations as part of the enforcement action.

The termination marks a significant milestone for Citigroup, effectively closing a chapter that had required extensive modifications to its compliance infrastructure and regular reporting to regulators over the past decade.

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