Financial giant ING Bank N.V. is learning a $619 million lesson about the perils of doing business with sanctioned companies, the result of which is believed to be the largest settlement ever with the Treasury Department's Office of Foreign Assets Control (OFAC).
On June 12, the Amsterdam-based financial institution agreed to forfeit $619 million to the Justice Department and the New York County District Attorney’s Office to settle charges that it violated the International Emergency Economic Powers Act, the Trading with the Enemy Act, and New York state laws, for illegal transactions on behalf of sanctioned Iranian and Cuban entities. According to authorities, ING Bank moved more than $2 billion illegally through the U.S. financial system between the early 1990s and 2007, conducting more than 20,000 transactions. As a result of the bank’s conduct, unaffiliated financial institutions in the U.S. processed transactions that would have been rejected or blocked under OFAC’s rules.
U.S. Attorney Ronald C. Machen said the $619 million forfeiture “holds ING accountable for its wrongdoing.”
“Banks that try and skirt U.S. sanctions laws undermine the integrity of our financial system and threaten our national security,” Machen said in a prepared statement. “When banks place their loyalty to sanctioned clients above their obligation to follow the law, we will hold them accountable. On more than 20,000 occasions, ING intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities.”
According to court documents, ING Bank processed payments for its Cuban banking operations through its Curaçao branch on Cuban customers’ behalf “without reference to the payments’ origin.” Among other things, the bank was also accused of eliminating payment data to hide the involvement of sanctioned countries Cuba and Iran, and of threatening employees if they refused to remove information about sanctions entities from payment messages.
As a result of the settlement, and ING Bank’s willingness to cooperate, authorities agreed to suspend criminal charges against the bank. Authorities will recommend dismissing them in 18 months so long as ING Bank abides by the terms of the deferred prosecution agreement.