US Steps Up Probe of EU Banks : August 29, 2007

The Financial Times Stephanie Kirchgaessner in Washington
The US justice department and other authorities have stepped up investigations into several large European banks for violating US sanctions against Iran, Libya, Cuba and Sudan. One person familiar with the probes said some banks had started to discuss settlements with the authorities and could agree to financial penalties by the end of the year. A number of the banks, whose names have not been disclosed, came under investigation by authorities, including the Treasury, when they alerted the government to potential violations after a landmark money laundering settlement by ABN Amro in 2005, according to people familiar with the matter. The Dutch bank was fined $80m by the Treasury’s Office of Foreign Assets Control, state regulators and the Federal Reserve after it emerged that its US offices had processed wire transfers that originated from Bank Melli Iran and engaged in transfers involving Libya. The payments breached anti-money laundering compliance rules and requirements that banks report suspicious activity. Some payments were transferred through the US after ABN obscured identifying references. After its $80m civil fine, ABN Amro said in April it was putting aside €365m to resolve a separate criminal investigation by the justice department into its dollar-clearing activities. The Clearing House and the Wolfsberg Group, two international banking associations whose members include HSBC, UBS and Credit Suisse, have endorsed changes that would provide banks and their counterparts with more information about those conducting wire transfers. US officials, including under-secretary Stuart Levey at the Treasury, applauded the banks’ initiative but it is thought unlikely to deter authorities from addressing previous violations.