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ANZ Incurs Fine From US Treasury
Australian banking major ANZ has been given a $6.95 million fine by the US Treasury after the lender entered into business transactions earlier in the decade with Sudan and Cuba, after the US initiated trade bans with the two countries.
The Melbourne based lender however did not receive the worst rebuke with other international banks such as UBS and ABN Amro receiving fines running into the tens of millions of dollars after having run afoul of US economic sanctions.
ANZ was given the fine after it emerged it had conducted approximately US$50 million of transactions with Sudan and Cuba between 2004 and 2006.
Though the dealings were not in breach of either Australian or UN laws or sanctions, the US has initiated a unilateral policy of economic embargo against both countries. Since ANZ has a US banking license, it is exposed to penalties levelled by the US government.
The issue first came to light in late 2006 when regulators stopped a US$15,000 transaction which involved the importation of Iranian stone.
The Australian lender then appointed accounting firm Deloitte to independently investigate more than 330,000 trade finance transactions for both domestic and international clients going back five years.
The investigation ultimately uncovered 42 transactions which were in breach of US economic sanctions levied on 13 different countries. The fine imposed by the US Treasury pertains to 31 trade finance deals involving counter parties from The 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. We’ve worked hard with regulators over the past three and a half years to comprehensively address the issues identified,” said ANZ chief risk officer Chris Page.
The penalty imposed by the US Treasury was not the severest fine that the US is capable of issuing, and was reduced based on the lenders co-operation and the fact that it had not been on the receiving end of any enforcement action by the US government in the five years preceding the dubious transactions.
Australian banking regulator Australian Prudential Regulation Authority (APRA) has been kept informed of ANZ’s US economic sanction.
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Actually, the OFAC investigation started with the blocking of funds in a US correspondent account of a transaction involving Sudan. This occurred end 2005.