UniCredit in $1.3 bn US settlement on sanctions violations

The Italian bank also agreed to plead guilty to violating US sanctions law as part of a deferred prosecution agreement with the Department of Justice.

Some of the charges concerned UniCredit’s operation of US accounts for the Islamic Republic of Iran Shipping Lines between 2007 and 2011 that obscured the involvement of the Iranian group, the Treasury Department said in a statement.

The Federal Reserve and New York State Department of Financial Services also joined in the sanctions on the bank.

Through its units in its home market, Germany and Austria, the bank processed more than 2,000 payments worth more than $500 million in the United States that appeared to violate US sanctions, the Treasury said.

The sanctions programs targeted proliferators of weapons of mass destruction as well as Burma, Cuba, Libya, Sudan and Syria, according to the Treasury.

“UniCredit Group banks routed transactions through the United States in a non-transparent manner, when those payments would have been blocked or rejected if their true nature had been clear, in violation of multiple sanctions programs,” said Sigal Mandelker, Treasury undersecretary for terrorism and financial intelligence.

UniCredit has cooperated with US regulators “for many years” and remains committed to “continued cooperation with regulators globally,” the bank said in a statement, adding that it already had set aside funds to resolve the complaint.

“The UniCredit Group will continue to make improvements to its compliance program as part of this comprehensive plan, as well as develop new initiatives to prevent and detect future violations of applicable laws in the ever-changing global financial sector,” the bank said.

As part of the settlement, UniCredit must implement internal controls and train staff on compliance with US sanctions law.

“The integrity of our financial system requires financial institutions to comply with our laws, and (UniCredit) willfully failed to do so,” Assistant US Attorney General Brian Benczkowski said.

“Today’s guilty plea and $1.3 billion penalty are just punishments for undermining US sanctions and putting our financial system at risk.”