Money-laundering bank must cough up $271m
Japan's Bank of Tokyo-Mitsubishi UFJ agreed to pay $US250 million ($271 million) to settle New York state charges that it illegally funnelled billions of dollars to countries that are under US sanctions.
The settlement is part of a larger effort by government regulators to clamp down on funding for countries under sanction, drug traffickers and terrorists.
International banks, including HSBC and Standard Chartered, have in recent years faced stiff penalties for flouting US laws. Critics, however, question whether fines are enough to deter this behaviour.
New York's Department of Financial Services said the bank cleared about 28,000 illicit transactions totalling $US100 billion from 2002 to 2007. Employees allegedly removed information from wire transfers that would have revealed the identity of the countries blacklisted by the United States.
Prosecutors said the bank even provided written instructions to employees that "in order to avoid freezing of funds" they should "omit" information on the involvement of an "enemy country".
"We have and will continue to take a hard line in rooting out misconduct at banks that threatens our national security," said Benjamin Lawsky, head of the New York state banking regulator.
Bank of Tokyo identified the practices six years ago, ended them quickly and alerted regulators to the nearly 30,000 transactions, a bank spokesman said.
Under the agreement, the bank must hire an independent consultant to evaluate its risk controls and report back to the New York financial regulator. The bank must also submit a plan to improve its compliance procedures.
The matter falls under the jurisdiction of regulators in New York and Washington.
It is unclear whether the US Justice Department will take action against the Japanese bank.
The Bank of Tokyo is the latest major international financial institution accused of evading money-laundering controls. In December, British bank HSBC handed over $US1.9 billion to the US Justice Department to resolve allegations that it laundered millions of dollars in drug profits at its Mexican branches. The accusations came to light in a Senate report in July that chastised regulators for failing to take more aggressive actions against HSBC.
Later last year, London-based Standard Chartered Bank took the heat when the New York regulators accused the bank of scheming with the Iranian government to launder $US250 billion from 2001 to 2007.
The bank agreed to pay $US340 million to settle those claims but said only a fraction of the transactions identified had slipped through the cracks.
The case thrust Mr Lawsky into the spotlight, drawing the ire of federal regulators for jumping ahead of their investigation of Standard Chartered.
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