ING to pay $619 million over Cuba, Iran sanctions

Tue Jun 12, 2012 3:04pm EDT
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By Karen Freifeld

NEW YORK (Reuters) - ING Bank NV ING.AS 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, officials said.

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.

ING eliminated payment data that would have revealed the involvement of sanctioned countries and entities, according to authorities. The bank also told clients how to evade computer filters designed to prevent sanctioned entities from gaining access to the U.S. banking system. And it provided U.S. finance services to sanctioned entities through shell companies and misuse of an internal ING account.

Amsterdam-based 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," ING Chief Executive Jan Hommen said in a statement.

A two-year criminal probe was conducted jointly between the U.S. Department of Justice and the office of Manhattan District Attorney Cyrus Vance Jr. 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 the illegal movement of money through banks in New York on behalf of clients subject to U.S. sanctions.

Credit Suisse AG agreed to pay $536 million in 2009 to settle charges of illegal transactions involving Iran, Cuba and Libya, among other countries. Lloyds TSB Bank Plc agreed to forfeit $350 million that year to settle charges it altered records for clients from Iran, Sudan and other sanctioned countries. Barclays settled similar charges in 2010 for $298 million.   Continued...