This was a big one – OFAC didn't hide this one behind an anonymous link like most of them are. The bank violated Burmese, Iranian, Sudanese and Cuban sanctions. These were egregious violations, but they were voluntarily self-disclosed.
What's fascinating is the amount of the underlying transactions:
RBS processed 24 wire transfers totaling approximately $290,206 between August 19, 2005, and October 16, 2009, involving Cuba in apparent violation of the CACR. The total base penalty for this set of apparent violations was $780,000. RBS processed 46 wire transfers totaling approximately $375,946 between July 22, 2005, and July 9, 2009, involving Burma in apparent violation of the BSR, E.O. 13448, and/or the JADE Act. The total base penalty for this set of apparent violations was $5,769,308. RBS processed 326 wire transfers totaling $32,469,380 between July 1, 2005, and August 12, 2009, involving Sudan in apparent violation of the SSR. The total base penalty for this set of apparent violations was $54,860,306. RBS processed 38 wire transfers totaling approximately $795,345 between September 6, 2005, and November 6, 2009, involving Iran in apparent violation of the ITR. The total base penalty for this set of apparent violations was $4,835,000.
So, 434 transactions totalling around $34 million resulted in a fine of over $33 million (from a base penalty of over $66 million – 1/2 the statutory maximum due to the voluntary self-disclosure). Why?
- RBS’ conduct was reckless
- Several members of RBS management responsible for managing and/or overseeing operations in the bank’s Global Correspondent Banking and Payment Operations units were aware of the conduct that led to the apparent violations
- The apparent violations conferred significant benefit to persons subject to U.S. sanctions
- RBS is a large, commercially-sophisticated global financial institution
- RBS did not maintain adequate policies or procedures to ensure compliance with the sanctions programs administered by OFAC
- Any civil penalty should be commensurate with the seriousness of RBS’ conduct in order to achieve maximum future compliance effect and deter similarly situated financial institutions.
Mitigation was extended because:
- RBS has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations
- RBS provided substantial cooperation to OFAC
- RBS took remedial action in response to the matters described above.
OFAC further reduced the proposed penalty in light of RBS’ agreement to settle its potential liability for the apparent violations.
The deterrence effect seems to be popping up in a lot of these recent settlements. When you only have 175 staff members, perhaps penalties are getting larger – and being publicized more frequently – in order for maximum impact.
Link:
Posted with BlogsyFiled under: Cuba Sanctions, Iranian Sanctions, OFAC Updates, Settlements, Sudan Sanctions
