RBS under investigation for violating US sanctions on Iran

Aug 22, 2012

US investigating RBS Iran transactions following Standard Chartered’s $340m settlement

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US AUTHORITIES are investigating Royal Bank of Scotland over suspected breaches of US sanctions against Iran, the same charge that was levelled at Standard Chartered earlier this month.
Eighteen months ago the UK bank volunteered information to the US federal authorities after the alleged violations were uncovered by chief executive Stephen Hester, who initiated an internal review of the bank not long after his arrival three years ago, reports The Financial Times.

The FT claims to have spoken to several people close to the situation, who confirmed the Federal Reserve and Department of Justice are conducting the enquiry, which has already resulted in the departure of a senior risk manager.
RBS has so far declined to comment on the proceedings but in its half-year report filed on 8 August, the bank said it had "initiated discussions with UK and US authorities to discuss its historical compliance with applicable laws and regulations, including US economic sanctions regulations".
The case comes after Standard Chartered last week agreed a settlement of $340m to be paid to New York regulators over its illicit transactions with Iran.
The two British institutions are the latest banks to come under scrutiny from US regulators over the concealment of transactions with Iran.
Last month Japan's Sumitomo Mitsui Financial Group told investors that a number of transactions with countries under US sanctions had been identified and disclosed to US authorities. Germany's Commerzbank revealed on Tuesday that it was assisting US federal and New York authorities with an investigation into the bank's past dealings with Iran.
News of the probe is another blow for RBS after an IT failure in June that led to millions of customers being unable to access their accounts and claims that it was involved in the Libor interest rate scandal.
The Guardian reports that this is not the first time RBS has faced questions over US sanction laws. In 2010, it agreed to pay $500m to settle similar allegations against ABN Amro, a Dutch bank RBS acquired in 2007.

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