Royal Bank of Scotland (RBS) is investigated by the Federal Reserve (Fed) and the U.S. Justice Department for possible violation of sanctions imposed on Iran, an investigation that has already led to the departure of a director of risk management, according to Financial Times.
Sources close to the situation said that the investigation comes after the British bank made available to these institutions on a voluntary basis information in this case about 18 months ago. RBS discovered the offending activities after Stephen Hester, Chief Executive Officer of the RBS Group, has initiated an internal investigation shortly after coming to bank management, three years ago.
According to The Guardian, RBS announced in its report filed on August 8 that it “initiated discussions with UK and US authorities to discuss its historical compliance with applicable laws and regulations, including US economic sanctions regulations”. The same disclosure was made by the bank to its investors a year and a half ago. A Federal Reserve spokesman said that it would not “comment on supervisory matters pertaining to individual institutions”.
The case is added to other investigations against British, European and Japanese banks investigated by regulators on allegations of illegal transactions with Iran, before the introduction of stricter rules in the USA, in 2008.
RBS agreed to pay in 2010 a fine of $500 million to settle charges that a Dutch bank purchased by RBS, ABN Amro Dutch has also violated the U.S. laws on Iran sanctions. Another British bank, Standard Chartered, agreed last week to pay a fine of $340 million to the Department of Financial Services in New York state for closing an investigation into illegal transactions with Iran.
The investigation against RBS is the latest in a series of bank problems, such as a major IT deficiency, improper selling of financial products and involvement in the scandal on manipulating Libor interest.
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