Italy's UniCredit bank and two subsidiaries are paying $1.3 billion to US authorities to settle allegations of breaching sanctions.
UniCredit was alleged to have engaged in transactions worth billions of dollars with clients from sanctioned nations including Iran, Libya and Cuba.
UniCredit Bank AG, the bank's German arm, has agreed to plead guilty to federal and New York state criminal charges for illegally moving hundreds of millions of dollars through the US financial system on behalf of sanctioned entities. UniCredit Bank AG's guilty pleas relate to violations of US sanctions programmes, some of which relate to Iran's state-owned shipping company, the Islamic Republic of Iran Shipping Lines (IRISL). US Assistant Attorney General Brian Benczkowski said that UniCredit Bank AG went to "great lengths" to help IRISL evade sanctions and gain access to the US financial system.
The Austrian arm of the bank, UniCredit Bank Austria AG , has entered into non-prosecution agreements with federal and state authorities in the US. UniCredit Bank Austria has also agreed to resolve parallel investigations with the US Department of Treasury, the Board of Governors of the Federal Reserve and the New York Department of Financial Services (DFS). UniCredit has said that it has agreed to retain an independent consultant to assess its improvements and compliance program, as part of its settlements with the Federal Reserve and the DFS.
These decisions bring to an end an investigation into UniCredit that has lasted six years and shows, once again, the US willingness to take the lead on investigation and enforcement of financial breaches. The conclusion of its investigation comes just days after the UK-based Standard Chartered bank paid $947M to US authorities in relation to allegations that it violated sanctions.
Such incidents call into question the effectiveness of compliance structures in certain institutions – as UniCredit and Standard Chartered are far from the only ones under investigation for such improprieties.
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