According to the Federal Reserve. ‘the Bank lacked adequate transparency, risk management, and legal and compliance review policies and procedures to ensure that activities conducted at offices outside of the United States, primarily though the firm’s corporate and investment banking operations, complied with applicable OFAC (Office of Foreign Assets Control) Regulations.’
From 2007 to 2012, the bank processed US dollar transfers involving groups regulated by OFAC without properly documenting the transactions. The bank has reached an agreement with the department of justice, the district attorney for the county of New York, OFAC and the New York state department of financial services. As part of the agreement, the bank has to institute a program to comply with US sanctions. The monetary settlements that the bank entered with the Federal Reserve and other US agencies total $1.34 billion.
Delayed prosecution agreement
The bank also signed a delayed prosecution agreement with the US Attorney’s Office for the Southern District of New York that says the government will not prosecute if the bank complies with the agreements during a three-year probation period. The bank said it has ‘committed, beyond the extensive actions it has already taken to date, to enhance its compliance program to prevent and detect potential violations of U.S. economic sanctions regulations and New York state laws, and to enhance corporate oversight of its sanctions compliance program.’