RBS agrees to pay $100 million for sanction violations

Regulators allege it failed to report critical information on transactions with foreign nations

Royal Bank of Scotland Group has agreed to pay $100 million to New York State and Federal regulators for reputedly failing to adhere to sanction programs between 2002 and 2011. The settlement will close probes pending from the New York Department of Financial Services, The U.S. Treasury Department’s Office of Foreign Assets Control and the Federal Reserve.

The probes began following allegations that RBS failed to provide information about transactions from parties in Iran, Sudan, Burma and Cuba. There were roughly 3,500 transactions, valued at $523 million. That did not meet the disclosure requirements of the sanctions.

Other banks that have run afoul of sanction laws in recent months, with Bloomberg reporting that Mitsubishi UFJ Financial Group Inc., HSBC Holdings Plc (HSBA), Standard Chartered Plc (STAN) and ING Bank NV have also recently settled probes into their failure to report transactional details on dealing with sanctioned nations.

The moves are not surprising, given the United States’ aggressive policing of international banking and business practices. This has not only been the case for sanction enforcement but also for the Foreign Corrupt Practices Act, which attempts to ensure that major institutions do not offer kickbacks to foreign nationals for business favors.

Benjamin M. Lawsky, Superintendent of Financial Service at the New York Department of Financial Services, said in a statement, “Our continued objective is to create higher standards for ethics and accountability at large banks. That will not happen overnight, but through a sustained effort – including strong enforcement of our anti-money laundering laws – we will work toward that critical goal.”

In response to the settlement, RBS is said to have dispatched a number of employees involved with the transactions. The bank also released a statement saying that it “deeply regrets” the lapse in judgment, and that it will put considerable efforts into its compliance measures to prevent it from happening again.

 

For more on international business enforcement check out these stories from InsideCounsel:

Federal prosecutors keep close eye on overseas corruption

List of most corrupt countries updated

Financial firms face FCPA fines for foreign fraternization

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