ING Bank NV agreed to pay $619 million to settle U.S. government allegations that it violated U.S. sanctions against Cuba, Iran and other countries. It was the biggest ever fine against a bank for sanctions violations.
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U.S. authorities said ING moved $1.6 billion illegally through banks in the United States from the early 1990s through 2007 by concealing the nature of the transactions.
According to authorities, ING eliminated payment data that would have revealed the involvement of sanctioned countries and entities. ING told sanctioned clients from those countries how to conceal their involvement and evade computer filters designed to prevent sanctioned entities from gaining access to the U.S. banking system. And the bank provided U.S. finance services to the sanctioned entities through shell companies and misuse of an internal ING account.
ING said in a statement its banking unit took a provision in the first quarter to cover the penalty, and that it had taken steps to improve its compliance. It closed its representative office in Cuba in 2007 and terminated its relationships with sanctioned banks.
"The violations that took place until 2007 are serious and unacceptable," Jan Hommen, ING's chief executive, said in a statement.
The fine was the largest ever against a bank in connection with an investigation into U.S. sanctions violations, the Treasury Department said.
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A two-year criminal probe was conducted jointly between the U.S. Department of Justice and the office of Manhattan District Attorney Cyrus Vance. The Treasury Department's Office of Foreign Assets Control conducted its own investigation.
ING is the fourth major bank to settle with New York and U.S. authorities over "stripping" wire transfer information to hide that they were illegally moving money through banks in New York on behalf of clients subject to U.S. sanctions.
Credit Suisse AG agreed to pay a $536 million fine in 2009 to settle charges. Lloyds TSB Bank Plc agreed to forfeit $350 million that year to settle charges it altered records so clients from Iran, Sudan and other sanctioned countries could do business with the U.S. banking system. Barclays settled in 2010 for $298 million.
"These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking and ultimately contribute to the fight against money laundering and terror financing," Manhattan District Attorney Cyrus Vance said.
ING said it had investigated transactions associated with ING Bank's Cuban operations, as well as business with counterparties in other countries subject to the U.S. sanctions.
It said the issues did not involve ING's insurance and investment management operations, nor the retail banking side or ING Direct.