ABN AMRO bank pays 500 million for busting US sanctions

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Former ABN AMRO bank is paying 500 million dollars to the United States for operating a huge money-laundering scheme for banks and clients in blacklisted countries, US officials said Monday.

"Over the course of a decade, ABN AMRO assisted sanctioned countries and entities in evading US laws by facilitating hundreds of millions of US dollar transactions," said US Attorney Ronald Machen.

The Department of Justice said the Dutch bank, taken over by Royal Bank of Scotland in 2007, had helped banks and customers from blacklisted countries -- including Cuba, Iran, Libya, and Sudan -- to carry out transactions.

Those countries are all under US sanctions. Communist-run Cuba for example has been under a US economic embargo for almost half a century.

But according to court documents, more than 3.2 billion dollars involving shell companies and high-risk transactions with foreign financial institutions flowed through ABN AMRO's New York branch.

"ABN AMRO facilitated the movement of illegal money through the US financial system by stripping information from transactions and turning a blind eye to its compliance obligations," said Assistant Attorney General Lanny Breuer in a statement.

"It is essential that financial institutions both large and small properly monitor the origins of funds flowing into our financial system. When financial institutions fail to do so, and, even worse, manipulate information in order to profit from prohibited transactions, they will be held accountable."

ABN AMRO agreed to forfeit 500 million dollars to the US government in exchange for escaping formal prosecution on charges of conspiracy and violating US bank secrecy laws in the scheme said to have started in June 1995 and lasted until December 2005.

Over the decade, some offices, branches, and subsidiaries of ABN AMRO had removed or altered names and references to sanctioned countries from transfers so the scam could not be spotted, the Justice Department said.

New tighter controls were then brought in, but illegal transactions still took place with some sanctioned countries from 2006 to the end of 2007, it added.

"If global banks and businesses wish to conduct financial transactions in America, they are welcome to do so as long as they abide by our laws that govern those transactions," said Victor Song, Chief of Internal Revenue Service Criminal Investigation.

ABN AMRO was taken over in 2007 by a consortium, RFS Holdings, which grouped the Royal Bank of Scotland (RBS), with Banco Santander of Spain and Belgo-Dutch group Fortis.

But on April 1 this year, it was legally separated from RBS and is now an independent bank, wholly owned by the Dutch government and under the supervision of the Dutch Central Bank.

© 2010 AFP

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