The U.S. Treasury Department Tuesday announced a record settlement with ING Bank, N.V. concerning allegations that it allowed clients to circumvent financial sanctions against several countries, primarily Cuba.
The Treasury’s Office of Foreign Assets Control announced a US$619 million settlement with ING Bank, which is the largest settlement of this sort, resolving an investigation into the alleged intentional manipulation of information about parties facing sanctions in more than 20,000 transactions that were routed through third-party banks located in the United States between 2002 and 2007.
According to the Treasury department, the bank’s apparent violations, which involved routing more than US$1.6 billion through the US despite sanctions, arose out of policies at multiple offices of its wholesale banking division. It says that, starting in the 1990s, ING Bank employees in Curacao began omitting references to Cuba in payment messages sent to the U.S. in order to prevent U.S. financial institutions from identifying prohibited transactions. It also created fraudulent endorsement stamps for use by Cuban financial institutions in processing travelers cheque transactions, which disguised the involvement of Cuban banks in these transactions when they were processed through the U.S. And, it routed payments made on behalf of U.S.-sanctioned Cuban clients through other corporate clients to obscure the sanctioned clients’ identities.
“The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said assistant attorney general for national security, Lisa Monaco.
Treasury notes that ING Bank promises that it has terminated the conduct in question. It is also required to conduct a review of, and to submit a report, regarding its policies and procedures to ensure that its OFAC compliance program is functioning effectively to detect, correct, and report any sanctioned transactions that might occur.
ING Bank took a provision in the first quarter of 2012 to cover the penalty announced today. It also said that it has cooperated closely with regulators and other authorities and that it has since taken various steps to strengthen global compliance risk management.
“The violations that took place until 2007 are serious and unacceptable. The facts as compiled in the statement of the Department of Justice describe a very different ING than the company we’re all working so hard for today,” said Jan Hommen, CEO of ING Group. “Since starting the investigations in 2006, ING Bank has taken decisive actions to strengthen compliance throughout the organisation and heighten employee awareness of compliance risks. This continues to be a key priority in the interests of our customers, employees and other stakeholders, and serves to ensure we remain abreast of compliance risks in an increasingly complex financial services industry.”