ANZ Bank cops fine for breaking US sanctions

News from Cuba | Tuesday, 25 August 2009

Original story from Brisbane Times

ANZ has been hit with a $6.95 million fine from the US Treasury for breaching trade bans after it entered into dealings with Sudan and Cuba earlier this decade

However the Australian bank appears to have escaped the full brunt of the fines. Other banks that have run foul of US economic sanctions including ABN Amro and Swiss-based UBS have seen fines run into the tens of millions of dollars.

The fine follows ANZ engaging in about $50 million worth of US dollar transactions with Cuba and Sudan between 2004 and 2006.

While the transactions did not breach Australian laws or United Nations economic sanctions, the US government has long-standing economic embargoes against these countries. The ANZ bank, though, operates a US banking licence, exposing it to the US penalty.

ANZ initially became aware of the issue in late 2006 when regulators last year blocked a $US15,000 transaction involving the import of stone from Iran.

ANZ appointed Deloitte to conduct an independent investigation of more than 330,000 trade finance transactions for Australian and international clients going back five years. This ultimately turned up 42 deals found to have breached US economic bans on 13 countries. However the fine from the US Treasury only relates to 31 trade finance transactions involving parties in Sudan and Cuba.

As part of its settlement with the US Treasury's Office of Foreign Assets Control, ANZ also committed to increased compliance across its global operations, including further training for staff.

"ANZ recognises that during the 2004 to 2006 period, the Bank's compliance with US economic sanctions did not meet the high standards we expect," said ANZ chief risk officer Chris Page.

"We've worked hard with regulators over the past three and a half years to comprehensively address the issues identified," Mr Page said.

The US Treasury watered down ANZ's potential penalty based on the bank's co-operation and the fact that it had not been subject to an enforcement action in the five years preceding the transactions at issue.

Australian bank regulator Australian Prudential Regulation Authority has been kept informed of ANZ's US economic sanction.

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