The fine levied on the banking, insurance and financial services giant ING Group was the biggest ever against a bank for sanctions violations, according to the department’s Office of Foreign Assets Control (OFAC).
OFAC investigated the bank’s “intentional manipulation and deletion of information” relating to more than 20,000 financial and trade transactions, routed through the U.S. between 2002 and 2007.
Those actions, which involved more than $1.6 billion moved illegally through the U.S. financial system, were “in apparent violation of” regulations pertaining to business with Cuba and Iran, as well as with Burma, Sudan and Libya, the department said in a statement. (The Libya regulations have since been lifted.)
Havana’s Prensa Latina said the Dutch bank has now “become a new victim of the U.S. blockade against Cuba,” which it said had cost Cuba more than $975 billion over the past half-century.
The action, and similar earlier ones, showed “the extraterritorial dimension of the U.S. blockade, which has been tightened despite the change in the politics towards Havana so much announced by President Barack Obama,” it said.
“The United States has maintained an economic, commercial financial blockade on Cuba for over 50 years, in violation of the U.N. Charter and international law,” the agency added. “For over 20 years, the international community has condemned this U.S. policy against Cuba in successive U.N. votings.”
Every year since 1992, the U.N. General Assembly has voted to condemn the U.S. embargo against the Castro regime. The resolutions have attracted ever-growing support, with last year’s passing by a vote of 186-2 (the U.S. and Israel).
In its statement on Tuesday’s settlement OFAC refers to an “array of stratagems” used by ING Bank employees in Curacao and several European countries to hide or remove references to Cuba from transaction data – in some cases over a long period of time.
The full settlement agreement provides more detail. In Curacao, ING’s Netherlands Caribbean Bank – a joint venture with the Cuban government – developed payment processing manuals instructing employees to give special attention to transactions related to Cuba, to avoid confiscation by U.S. banks.
Senior management “regularly reminded ING Curacao staff, by email and verbally, to avoid Cuba references in payment instructions. Staff members who failed to comply with the instructions were subject to oral reprimands, warning letters, or termination.”
One ING division in the Netherlands had routed payments, made on behalf of U.S.-sanctioned Cuban clients, through other clients so as to obscure the identities of the sanctioned clients, OFAC said.
In a 2003-4 incident, ING Bank’s branch in Romania omitted details from a letter of credit involving a U.S. institution, allowing the export of U.S.-origin goods – an aircraft engine – to Iran.
“Our sanctions laws reflect core U.S. national security and foreign policy interests and OFAC polices them aggressively,” said OFAC director Adam Szubi. “Today’s historic settlement should serve as a clear warning to anyone who would consider profiting by evading U.S. sanctions.”
The agreement settles various inquiries into ING Bank, including those carried out by OFAC, the Department of Justice, the D.C. U.S. Attorney’s office and the New York County District Attorney’s office.
The company has agreed to forfeit $309.5 million to the United States and $309.5 million to the New York County D.A.’s office.
‘Doing business with tyrants and extremists’
ING Group said in a statement its banking group has taken various measures since 2007 to improve compliance, including shutting down a representative office in Cuba and ending relationships with sanctioned institutions.
In 2009, ING finalized the liquidation of the Netherlands Caribbean Bank. Back in 2006 the institution in Curacao was added to OFAC’s list of “Specially Designated Nationals,” entities and individuals whose assets are frozen and with whom Americans may not do business.
ING said steps it had taken also included the setting up of a team focusing on detecting and preventing money laundering and terrorist financing.
ING Group CEO Jan Hommen called the violations “serious and unacceptable” but said the facts described by the U.S. authorities “describe a very different ING than the company we’re all working so hard for today.”
U.S. House Foreign Affairs Committee chairman Ileana Ros-Lehtinen (R-Fla.), who had earlier written to Treasury Secretary Timothy Geithner and ING’s Hommen urging investigations, welcomed Tuesday’s agreement.
“ING executives deceived our banking regulators as they sought to profit by doing business with dictatorial and anti-American regimes, including those in Cuba and Iran,” she said, voicing the hope that other companies tempted to do business with terror-sponsoring states would reconsider.
“If their consciences don’t prevent them from doing business with tyrants and extremists, perhaps a $600 million dollar fine will.”
ING is the fourth major bank to settle with U.S. and New York authorities since 2009 over illegal activities relating to Iran, Cuba, Sudan, Burma and Libya. The other three were Barclays, Lloyds TSB and Credit Suisse (a $536 million settlement which, until Tuesday, was the biggest penalty in OFAC’s history).