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UPDATE 1-U.S. Fed Reserve Board ends enforcement action against Industrial Bank of Korea

(Adds details on enforcement action, earlier settlement)

NEW YORK, Dec 6 (Reuters) - The Federal Reserve Board on Tuesday said it is terminating an enforcement action against Industrial Bank of Korea (IBK) over previous deficiencies in the bank's risk management and anti-money laundering compliance.

IBK in 2016 agreed with the Federal Reserve Bank of New York and New York Department of Financial Services (NYDFS) to enhance oversight and management of the bank's compliance with U.S. laws and regulations, according to details from the 2016 agreement.

The agreement was with the bank's Seoul and New York branches.

The Seoul-based bank in April 2020 agreed to pay $35 million in fines to the NYDFS to settle charges it violated New York state laws designed to thwart money laundering.

At the time, Linda Lacewell, superintendent of NYDFS, said IBK and its New York branch suffered from deficient internal controls from 2010 to 2019, which persisted even after the 2016 agreement with the department and the New York Fed to address its deficiencies.

She said this contributed to IBK's failure in 2011 to stop a $1 billion fraud where a client allegedly posing as a small-business owner used fake contracts and invoices to convert funds he received in Korean won from a restricted IBK account into U.S. dollars, and then disbursed the money globally. (Reporting by Chris Prentice and John McCrank; Editing by Chizu Nomiyama)