On June 12th, 2018, the Office of Foreign Assets Control (OFAC) announced a settlement agreement with ING Bank N.V., also known as ING NA, for apparent violations of multiple sanctions programs. The Dutch bank was ordered to pay $619 million, which is the largest penalty OFAC has ever imposed on a financial institution.
According to the OFAC announcement, ING NA willfully violated U.S. sanctions against Cuba, Iran, and Sudan by processing thousands of transactions through its U.S. financial institutions between 2002 and 2012. Additionally, ING NA was found to have violated sanctions against the former Liberian president, Charles Taylor, by processing transactions involving his assets. These actions were in direct violation of U.S. law and OFAC regulations.
OFAC`s announcement provides specific examples of ING NA`s sanctions violations. In one instance, an ING NA subsidiary in Belgium knowingly facilitated a $2 million transaction with a Cuban bank. In another instance, ING NA`s Moscow office processed numerous transactions related to Iranian entities. In total, the bank processed over 20,000 transactions worth more than $1.6 billion in violation of U.S. sanctions.
The settlement agreement requires ING NA to forfeit $619 million to the U.S. Department of Justice and other U.S. government agencies. Additionally, the bank is required to take significant steps to improve its compliance with U.S. sanctions regulations. These steps include upgrading its compliance program, providing OFAC with detailed reports of its compliance efforts, and appointing an independent monitor to oversee its compliance program.
The OFAC settlement agreement with ING NA serves as a warning to financial institutions that violations of U.S. sanctions will not be tolerated. OFAC will continue to enforce U.S. sanctions regulations and levy hefty penalties on violators. Financial institutions must ensure that their compliance programs are robust and effective to avoid significant financial and reputational damage.
In conclusion, the OFAC settlement agreement with ING NA highlights the importance of compliance with U.S. sanctions regulations. Financial institutions must take steps to ensure they are in compliance and avoid processing transactions that violate U.S. sanctions. Failure to do so can result in significant fines, as ING NA learned the hard way. Compliance with U.S. sanctions is not an option, but a requirement for any financial institution operating in the U.S. market.