The Strategist

US Treasury sets a record in fines in April

05/02/2019 - 02:52

The April 2019 was marked by completion of an investigation by the US Treasury Department against two banks: the British Standard Chartered Bank, as well as the Austrian, Italian and German branches of UniCredit. The American regulator accused them of multiple violations of US sanctions regimes. The case of Standard Chartered was related to sanctions against Iran, Sudan, Cuba and Syria. The case of Unicredit involved violations in Burma, Libya and malpractice in functional programs.

Pavel Ševela / Wikimedia Commons
Pavel Ševela / Wikimedia Commons
However, this record is associated not with the banks’ names, but with the amounts of fines. Standard Chartered agreed to pay the US Treasury a little more than $ 657 million, and Unicredit - $ 611 million (most of sum - more than $ 553 million - will be borne by UniCredit Bank AG with headquarters in Munich). Along with the Treasury, other regulators like the Ministry of Justice, the Board of Governors of the Federal Reserve System, the district prosecutor's offices, etc. also have complaints against the banks. It means that the total amount will be much higher. Of course, the April fines have not yet surpassed the BNP Paribas record of 2014, when the bank paid more than $ 963 million to the Treasury alone. On the other hand, there have been no such large fines for a long time. For example, the Dutch ING Bank in 2012 paid the Ministry of Finance $ 619 million, and the Swiss Credit Suisse AG in 2009 - $ 536 million.
The set of aggravating and mitigating circumstances noted by the Treasure Department is also quite common. Both cases were classified as “egregious”: usually they include deliberate violations or neglect of existing legislation. In both cases, key violations were not disclosed voluntarily by banks. However, later the banks actively cooperated with the Americans in the investigation. They pledged to significantly expand their monitoring systems for suspicious transactions and significantly enhance compliance programs — these are typical steps for companies subject to secondary sanctions.