Treasury Fines Bank for Sanctions Violations

Thursday, December 12, 2013
Not only do Iran, Sudan, Burma and Cuba share brutal dictatorships. Not only are they among the world's worst violators of fundamental human rights. But they also share the same unscrupulous business partners and practices.

It isn't a coincidence that banks and companies caught by Treasury violating Iran, Sudan and Burma sanctions (not to forget Syria and North Korea sanctions), are usually also violating Cuba sanctions. It's actually a cause for even greater concern.

From the U.S. Department of the Treasury:

Treasury Department Reaches $33 Million Settlement with the Royal Bank of Scotland plc

As part of a combined $100 million settlement with federal and state government agencies, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $33 million agreement with the Royal Bank of Scotland plc (RBS) to settle its potential liability for apparent violations of U.S. sanctions regulations.  Today’s settlement resolves OFAC’s investigation into apparent violations by RBS of U.S sanctions programs relating to Iran, Sudan, Burma, and Cuba.

From 2005 to 2009, RBS engaged in payment practices that interfered with the implementation of U.S. economic sanctions by financial institutions in the United States.  Those practices included removing material references to U.S.-sanctioned locations or persons from payment messages sent to U.S. financial institutions.  With respect to Iran, for example, RBS accomplished this by developing written procedures to send payments that omitted information about the Iranian nexus in cover payments sent to U.S. financial institutions.  The procedures instructed employees to list the actual name of the Iranian financial institution rather than the Bank Identifier Code in the beneficiary bank field of the payment instructions.  Doing so prevented the RBS payment system from automatically including references to the Iranian bank or Iran in related cover messages and resulted in the omission of that data from instructions sent to U.S. clearing banks.  While the instructions were developed to handle payments involving Iran, RBS identified that similar methods were used for certain payments involving Sudan, Burma, and Cuba as well.