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U.S. Regulators Impose Record $80 million Penalty on ABN Amro for Widespread Violations
printIn the largest-ever civil money penalty assessed against a financial institution for Bank Secrecy Act and money laundering violations in the United States, U.S. regulators announced Monday that ABN Amro shall pay $80 million in civil penalties to settle charges that, among other things, it illegally provided banks in Iran and Libya access to the U.S. financial system. In addition, federal and state regulators said that the Netherland's based bank failed to take steps to prevent correspondent accounts from being held by dubious shell companies in Russia and the former Soviet Republics, and misled examiners and compliance personnel about the...
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High-profile sanctions cases are spurring large banks and third-party software vendors to improve how they identify when counterparts and clients secretly act on behalf of blacklisted entities, say compliance experts.
The Royal Bank of Scotland will pay the United States $500 million over Bank Secrecy Act and sanctions violations committed by the now defunct ABN Amro, U.S. officials said Monday.
Financial institutions are struggling to determine how to comply with a federal ban on "facilitating" companies and individuals that do business with OFAC sanctioned countries, say compliance experts.
The Republic of the Netherlands must improve communication between agencies that investigate money laundering and terrorist financing and make better use of the suspicious transaction reporting information provided by financial institutions, according to a government audit report released Tuesday.
Banks seeking to acquire other financial institutions must carefully absorb, analyze and monitor the customer information and transaction history of its target not only to ensure it is paying a fair price but also to protect itself against possible regulatory trouble down the road.
The biggest challenge banking compliance departments face is the internal struggle for adequate resources and attention from senior management, says Markus Schulz, chief operating officer of the anti-money laundering compliance department for ABN AMRO in the Netherlands.
In a letter sent to SEC Chairman Christopher Cox on Thursday, Frank, chairman of the House Financial Services Committee, said the list unfairly includes companies that have divested, or have negligible business dealings, in these countries.
A senior DEA official confirmed that the agency is investigating the company's Miami-based private banking unit and said the case involves money laundering schemes known as black market peso exchanges, according to a report slated for publication in the July issue of Forbes.
The private banking unit is overseen by the company's Miami-based American Express Bank International, and has been plagued by anti-money laundering related regulatory trouble for more than a decade.
The bank, which is based in the Netherlands, said Thursday that it has set aside €365 million in anticipation of the settlement of a Justice Department criminal probe into ABN's dollar clearing activities, Office of Foreign Assets Control (OFAC) sanctions compliance and other issues.
The sanctions put pressure on U.S. banks to conduct greater due diligence on correspondent accounts to determine if they are linked to the Middle Eastern nation. That will likely continue a trend of foreign institutions dropping business dealings with the country.