Lloyds TSB Bank, plc OFAC Settlement: $217M (2009)

Lloyds had a policy of intentionally manipulating and deleting information about U.S. sanctioned parties in wire transfer instructions executed on behalf of its bank and non-bank customers. From June 2003 through August 2006, Lloyds routed at least 4,200 electronic funds transfers, with an aggregate value of USD 36,988,457, through third-party banks located in the United States, in apparent violation of IEEPA and the OFAC regulations related to Iran, Sudan, and Libya. These included: (i) at least 165 electronic funds transfers totaling USD 13,707,126 from June 26, 2003, through October 31, 2003, to the benefit of the Government of Iran and/or persons in Iran, including various Iranian financial institutions; (ii) at least 574 electronic funds transfers totaling USD 13,899,345 from June 26, 2003, through August 29, 2006, to the benefit of the Government of Sudan and/or persons in Sudan, including various Sudanese financial institutions; and (iii) approximately 3,542 electronic funds transfers totaling approximately USD 9,381,986 from June 26, 2003, to April 29, 2004, to the benefit of a Libyan customer.

Lloyds did not voluntarily self-disclose the apparent violations. OFAC mitigated the total potential penalty based on Lloyds' substantial cooperation, its prompt and thorough remedial response, and the fact that Lloyds had not been subject to an OFAC enforcement action in the five years preceding the transactions at issue. Lloyds agreed to a settlement with OFAC of USD 217,000,000. Lloyds' obligation to pay that amount to OFAC was deemed satisfied by its prior payment of a greater amount in satisfaction of penalties assessed by the U.S. Department of Justice and the New York County District Attorney's Office arising out of the same pattern of conduct.

The U.S. Department of Justice and the New York County District Attorney's Office separately assessed penalties against Lloyds arising out of the same pattern of conduct. Lloyds' prior payment to those authorities, in an amount greater than the USD 217,000,000 OFAC settlement figure, was deemed by OFAC to satisfy Lloyds' settlement obligation.

Lloyds agreed to have its Internal Audit Department conduct, on an annual basis for a period of two years, a review of the bank's policies, procedures, and a statistically significant sampling of USD payments to determine whether any payments subject to OFAC regulations were processed through, or on behalf of, any U.S. individual or entity. Lloyds agreed to use a qualified independent third party to oversee and certify the findings of its Internal Audit Department. The United Kingdom's Financial Services Authority, Lloyds' primary regulator in the U.K., was to approve the independent third party as well as the scope of the review.

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