The Royal Bank of Scotland is paying $100 million in fines to New York and federal banking regulators to settle civil investigations into allegations that some of its former employees helped concealed transactions involving customers from Iran, Sudan and other nations subject to international sanctions for roughly a decade.
Bank regulators in New York contend the former R.B.S. employees used a variety of techniques to conceal about 3,500 transactions involving the transfer of $523 million through New York banks.
The joint action announced on Wednesday by the New York State Department of Financial Services, the Federal Reserve and the Treasury Department’s Office of Foreign Assets Control is part of a continuing crackdown on banks that violate American laws against money laundering, specifically banks that enable transactions with countries that are subject to international sanctions.
The bank regulators gave R.B.S. credit in the settlement for beginning its own internal investigation into the matter in 2010 and dismissing the employees involved in the unlawful money transfers.
“R.B.S. took an important step by terminating a number of individual employees who engaged in misconduct,†Benjamin M. Lawsky, New York Superintendent of Financial Services, said in a statement.
In the settlement, R.B.S. will pay a $50 million penalty to New York bank regulators and a $50 million penalty to the Federal Reserve, of which $33 million will go to the Treasury Department. The British bank has terminated four employees and clawed back bonuses from another eight employees. It also agreed to put in place measures to stiffen its compliance with anti-money laundering laws.
R.B.S., in a statement, said the bank “deeply regrets†its failings.
The bank also said related criminal investigations by the Justice Department and the Manhattan district attorney’s office were concluded without those agencies taking any further action against R.B.S.
The four employees dismissed by R.B.S. included the bank’s former head of global banking services for Asia, the Middle East and Africa and the head of the money laundering prevention unit for corporate markets.
The bank regulators found that the former employees helped customers and companies with ties to countries under sanctions strip out identifying data from payment messages.
The settlement with R.B.S. is considerably smaller than the $1.92 billion HSBC paid to settle money laundering allegations last year, and the $667 million in fines paid by Standard Chartered to settle investigations into whether the British bank violated international sanctions against Iran.
