ABN Amro Bank, a global banking giant based in the Netherlands, has agreed to pay a total of $80 million in fines for violating regulations to prevent money-laundering, regulators and the bank said yesterday.
The Financial Crimes Enforcement Network at the Treasury Department said that ABN's "serious, longstanding and systemic" problems allowed people from Russia and other former Soviet republics to move $3.2 billion to shell companies in the United States from August 2002 to September 2003.
Investigations by state and federal officials also found that the Chicago and New York branches of the bank participated in wire transfers and trade transactions from 1997 to 2004 that violated economic sanctions on Libya and Iran.
"It's by far the largest such penalty," said Charles A. Intriago, a former federal prosecutor whose company, Alert Global Media, produces newsletters, seminars and conferences that track money-laundering.
The Bank of the Netherlands, which regulates Dutch banks, participated in the agreement although it did not levy a fine.
ABN said that the fines and operating changes required by the agreement resulted from lapses in controls that required the bank to identify, analyze and report suspicious transfers, many from Russia to New York. The bank had too few people monitoring the cash flows and they were too poorly trained to ensure compliance with the Bank Secrecy Act, which governs money-laundering, according to the agreement.
The fund transfers to the shell companies for which the bank was fined had been identified by the government in 2000 as a way criminals were illegally transferring wealth out of Russia and other Eastern European countries.
The violations of the sanctions involved indirect dealings with the Bank Melli of Iran and a Libyan-controlled bank in the United Arab Emirates. ABN's Dubai branch changed documentation to hide the fact that it was dealing with those banks, according to the agreement. ABN's United States branches failed to adequately respond to the "negative" internal audits related to such problems, the agreement said.
The fines will have little financial impact on ABN, which posted operating profits of about $5.53 billion in the first nine months of this year. But the bank also had to agree to numerous changes in its oversight and compliance programs, including additional scrutiny from outside auditors for some of its operations.
The bank signed cease and desist orders that could lead to further punishment for future transgressions.
"Further improving our compliance is the highest priority of the bank," said Rijkman Groenink, chairman of ABN's managing board, in a statement issued yesterday.
- 185 Corruption
- 194 World Financial Institutions