By Aruna Viswanatha and Anna Yukhananov
WASHINGTON (Reuters) - Royal Bank of Scotland Group Plc
Between 2005 and 2009, the bank processed around $34 million in wire transfers that violated sanctions against Sudan, Iran, Cuba and Myanmar, the Treasury Department said, adding that $32 million of that amount came from Sudan.
The bank also instructed its employees to remove references to the sanctioned locations from payment messages to U.S. financial institutions so that they would be processed, authorities said.
Regulators described one written policy at RBS, for example, which instructed employees that any dollar-denominated payment could not include: "1. The sanctioned country name. 2. Any name designated on the Office of Foreign Asset Control (OFAC) restricted list."
Members of the bank's management knew of the conduct, and some, including its head of global banking for Asia, Middle East and Africa, were fired in connection with the probe, authorities said.
In a statement, the bank said it "acknowledges and deeply regrets these failings." The bank also said it had initiated the investigation, shared information with authorities, and has committed almost 300 million pounds ($490 million) since 2010 to improve its sanctions controls.
Criminal authorities at the U.S. Justice Department and the District Attorney of New York have closed their related investigations and will not bring charges, RBS said.
"This action demonstrates our continuing efforts to aggressively enforce U.S. sanctions laws against Iran and other sanctioned parties," Adam Szubin, who runs the Treasury Department's OFAC unit, said in a statement.
The bank also entered into agreements with the U.S. Federal Reserve and the New York State Department of Financial Services.
The Fed, which levied $50 million of the penalty, ordered the bank to improve its sanctions compliance programs.
The New York bank regulator, which also levied a $50 million penalty, said that some $523 million in transactions were routed through New York correspondent banks involving Sudanese and Iranian customers.
RBS instructed employees to list the name of the Iranian financial institution rather than its identifying codes on wire transfers, which prevented the bank's payment system from automatically including references to Iran in the cover messages sent to U.S. clearing banks, regulators said.
Several UK banks have entered into settlements in recent years over continuing financial transactions with Iran despite U.S. laws against them, and for removing information from payments to get them processed in the United States.
Lloyds TSB Bank Plc became the first bank to settle, forfeiting $350 million in 2009. Others to pay penalties include Credit Suisse
In that case the New York bank regulator moved before federal counterparts and threatened to revoke the bank's state banking license.
(Reporting by Aruna Viswanatha and Anna Yukhananov in Washington, additional reporting by Karen Freifeld in New York; Editing by Gerald E. McCormick and Nick Zieminski)