Italian banking group UniCredit (UC) and two of its subsidiaries have agreed to pay penalties totaling around $1.3bn to the US and New York authorities to resolve investigations on charges related to violation of certain economic sanctions.
The Italian group alongside its banking subsidiaries UniCredit Bank (UCB) and UniCredit Bank Austria (UCBA) were charged of violating US economic sanctions and related New York state laws on Iran and other countries in the period from 2002-12.
The agreements were made by the two subsidiaries with the board of governors of the Federal Reserve System and the New York State Department of Financial Services (DFS).
UCBA also entered into a separate three-year non-prosecution agreement with the US Department Of Justice (DOJ) and the New York County District Attorney’s Office (DANY) to resolve charges of violations under federal and New York laws. DOJ and DANY agreed that they will not prosecute if UCBA complies with the terms of the agreement.
According to the DOJ, UCB defrauded the US by processing hundreds of millions of dollars of transactions using the US financial system on behalf of an entity designated as a weapons of mass destruction proliferator and other Iranian entities, which were subject to economic sanctions by the country.
DOJ criminal division assistant attorney general Brian Benczkowski said: “When the United States sanctioned Iranian entities for proliferating weapons of mass destruction, UCB AG went to great lengths to help one such entity – Islamic Republic of Iran Shipping Lines – evade sanctions to gain access to the U.S. financial system.
“The integrity of our financial system requires financial institutions to comply with our laws, and UCB AG willfully failed to do so. Today’s guilty plea and $1.3 billion penalty are just punishments for undermining U.S. sanctions and putting our financial system at risk.”
The New York Department of Financial Services (DFS) fined the Italian group $405m for breaching sanctions laws that involved billions of dollars in illegal and non-transparent transactions to clients in Cuba, Iran, Libya, Myanmar and Sudan and other countries that were subject to sanctions.
UniCredit, in a separate agreement, will pay a total of around $633m to settle with the US federal court a single charge of conspiracy and with the New York state court for two charged violations of New York law pertaining to violation of economic sanctions against Iran and other countries.
The Italian group, in a statement, said: “Prior to and throughout the course of the investigations, UC has voluntarily implemented a major Group-wide and bank-specific remediation and enhancement plan to strengthen its policies, procedures, supports, and controls to ensure full compliance with applicable economic sanctions and internal control requirements.”