Former ABN AMRO Bank, now named the Royal Bank of Scotland (RBS), has agreed to pay $500m to US Department of Justice in connection with a violation of the International Emergency Economic Powers Act (IEEPA) and violation of the Trading with the Enemy Act (TWEA), as well as a violation of the Bank Secrecy Act (BSA).
Lanny Breuer, assistant attorney General of the Criminal Division and Ronald Machen, attorney for the District of Columbia, said that ABN AMRO conspired to facilitate illegal US dollar transactions on behalf of financial institutions and customers from Iran, Libya, the Sudan, Cuba and other countries sanctioned in programs administered by OFAC.
According to US Department of Justice, from around 1995 and continuing through December 2005, certain offices, branches, affiliates and subsidiaries of ABN AMRO removed or altered names and references to sanctioned countries from payment messages. ABN AMRO implemented procedures and a special manual queue to flag payments involving sanctioned countries so that ABN AMRO could amend any problematic text and it added instructions to payment manuals on how to process transactions with these countries in order to circumvent the laws of the US, according to court documents.
As per court documents, beginning as early as January 1998 and continuing until approximately December 2005, ABN AMRO’s New York branch office willfully failed to establish an adequate AML program.
More than $3.2bn dollars involving shell companies and high risk transactions with foreign financial institutions flowed through ABN AMRO’s New York branch. ABN AMRO also admitted it failed to maintain proper documentation regarding its customers or maintain readily available documentation about its high risk clients.
Lanny Breuer, assistant attorney general, said: “ABN AMRO facilitated the movement of illegal money through the US financial system by stripping information from transactions and turning a blind eye to its compliance obligations. It is essential that financial institutions both large and small properly monitor the origins of funds flowing into our financial system. When financial institutions fail to do so, and, even worse, manipulate information in order to profit from prohibited transactions, they will be held accountable.”