Updated from 5:18 a.m. EDT

Citigroup

(C) - Get Report

has run afoul of Japanese regulatory authorities for the second time this decade.

Japan's Financial Services Agency ordered

Citibank Japan Ltd.

to suspend sales activities at its retail businesses, accusing the Citigroup unit of being lax when it comes to preventing money laundering.

The agency suspended all sales operations at Citibank Japan for one month, from July 15 to Aug. 14. The suspension covers advertising, sales campaigns and solicitation but doesn't restrict customers seeking a transaction with the bank.

The FSA said that Citibank's progress hasn't been sufficient since its first order to improve anti-laundering measures in September 2004.

"Despite the fact that the board of directors and management ... were responsible for the execution of the business improvement order, they lack an understanding of the rules applied in Japan, such as laws and regulations, and an awareness of improvement," the FSA said in a statement.

Citigroup was sanctioned by Japanese authorities in 2004. It was forced then to shut down its private banking operations in Japan for a number of violations ranging from loose money-laundering controls to overly aggressive sales tactics, according to the

Wall Street Journal

.

The regulatory action also could make it more difficult for the bank to sell certain assets in Japan in an effort to raise much-needed cash,

Reuters

notes.

"Citibank Japan is committed to implement all necessary measures to prevent any future occurrence of the problems identified," the company said Friday.

The bank said it will submit a business improvement plan to the FSA by July 31 and vowed to "clarify responsibility for this matter and take appropriate disciplinary action."

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