Dutch bank hit with record fine for passing money through U.S. financial entities on behalf of Cuban and Iranian clients

Posted on Wednesday, 06.13.12

Banking

Dutch bank hit with record fine for passing money through U.S. financial
entities on behalf of Cuban and Iranian clients

ING Bank secretly passed more than $2 billion through U.S. financial
entities on behalf of Cuban and Iranian clients.
By Juan O. Tamayo
jtamayo@ElNuevoHerald.com

In the largest fine ever assessed against a financial institution for
violating U.S. sanctions on Cuba and Iran, Netherlands-based ING Bank
will pay $619 million to the U.S. government, the Justice Department
announced Tuesday.

ING agreed to pay the fine for secretly moving more than $2 billion
through U.S. financial institutions in 20,000 transactions from the
early 1990s to 2007, all in violation of sanctions on Cuba and Iran,
according to the Justice Department.

"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," Assistant U.S. Attorney General for National
Security Lisa Monaco declared.

Cuba, Iran, Syria and Sudan are on the U.S. list of countries under
sanctions for supporting international terrorism. The half-century old
U.S. trade embargo against Cuba also bars Cuban entities from using U.S.
dollars in their transactions.

The Justice Department statement said ING fabricated endorsement stamps
so that two Cuban banks could fraudulently process dollar-denominated
travelers checks and advised Cuban and Iranian clients on how to conceal
transactions.

Senior ING officials also erased data from reports that would have
revealed the involvement of Cuban and Iranian entities, and threatened
to punish some employees who failed to remove those references from
documents, the statement added.

Jan Hommen, chief executive officer of the bank's parent ING Groep,
based in Amsterdam, called the violations "serious and unacceptable,"
but added the company has changed since then.

ING's insurance and U.S. banking operations were not involved in the
case or the sanctions.

"ING has accepted responsibility for its criminal conduct" and agreed to
pay the $619 million as part of a deferred prosecution agreement, the
Justice statement added.

Half the money will go to the U.S. Attorney's Office in New York, which
has been investigating ING, and the bank will have to make regular
reports on how it is complying with the U.S. sanctions rules.

"For years, ING Bank blatantly violated U.S. laws governing transactions
involving Cuba and Iran, and then used shell companies and other
deceptive measures to cover up its criminal conduct," Assistant Attorney
General Lanny A. Breuer said in the statement.

Adam J. Szubin, director of the Treasury Department's Office of Foreign
Assets Control, which enforces U.S. financial restrictions on foreign
countries, added that the fine was "a clear warning to anyone who would
consider profiting by evading U.S. sanctions."

Cuba has faced U.S. sanctions under the trade embargo since 1962. But
after the Sept. 11 terror attacks, tougher U.S. measures against
terrorism financing began hitting the communist-ruled island's financial
transactions even harder.

Credit Suisse Bank paid a $536 million fine to the U.S. government in
2009 to settle allegations of illegal dealings with Cuba, Iran, and
other sanctioned countries, while Switzerland's UBS paid another $100
million in 2004 for similar complaints.

A Jamaican branch of Canada's Bank of Nova Scotia was reported to have
refused to serve the Cuban Embassy in Kingston, and British-based HSBC
bank reportedly shut down several Cuban accounts it held around the world.

Several other financial services companies that operated in Cuba as well
as the United States — and were therefore subject to U.S regulations —
also closed their operations in the Caribbean island, complaining that
the U.S. regulations had become too burdensome and they risked costly
violations.

The Cuban government also complained that U.S. officials were freezing
funds in allegedly illegal Cuban accounts held in foreign banks. A 2006
report in a state-run newspaper, Trabajadores, estimated the money
frozen in 2005 alone at $268 million, but gave no details.

Florida Republican Rep. Ileana Ros-Lehtinen, who regularly leaned on the
U.S. government to punish Credit Suisse, UBS and ING Bank, said the
record fine "sends an unequivocal message that companies which break
U.S. law and conduct business with sanctioned countries will be found
out and severely penalized."

"It is not enough to have tough sanctions laws on the books. ING's
actions prove that vigorous enforcement and punishment of violators is
necessary to prevent our laws from being willfully ignored and turned
into paper tigers," said Ros-Lehtinen, the chair of the House Committee
on Foreign Affairs.

http://www.miamiherald.com/2012/06/12/2846348/dutch-bank-hit-with-record-fine.html