Royal Bank of Scotland OFAC Settlement: $33.1M (2013)

RBS processed wire transfers in apparent violation of four separate sanctions programs across overlapping periods. For Cuba, RBS processed 24 wire transfers totaling approximately $290,206 between August 19, 2005, and October 16, 2009, in apparent violation of the CACR, 31 C.F.R. part 515. For Burma, RBS processed 46 wire transfers totaling approximately $375,946 between July 22, 2005, and July 9, 2009, in apparent violation of the BSR, 31 C.F.R. part 537, E.O. 13448, and/or the JADE Act. For Sudan, RBS processed 326 wire transfers totaling $32,469,380 between July 1, 2005, and August 12, 2009, in apparent violation of the SSR, 31 C.F.R. part 538. For Iran, RBS processed 38 wire transfers totaling approximately $795,345 between September 6, 2005, and November 6, 2009, in apparent violation of the ITR, 31 C.F.R. part 560.

RBS voluntarily self-disclosed all apparent violations under OFAC's Economic Sanctions Enforcement Guidelines. OFAC determined the apparent violations were egregious, based on its assessment that: RBS' conduct was reckless; several members of management responsible for overseeing operations in the bank's Global Correspondent Banking and Payment Operations units were aware of the conduct; the apparent violations conferred significant benefit to persons subject to U.S. sanctions; RBS is a large, commercially-sophisticated global financial institution; RBS did not maintain adequate policies or procedures to ensure compliance with OFAC-administered sanctions programs; and any civil penalty should be commensurate with the seriousness of RBS' conduct in order to achieve maximum future compliance effect and deter similarly situated financial institutions.

The statutory maximum penalty was $132,489,228. The total base penalty under the Guidelines for all apparent violations was $66,244,614, comprising $780,000 for the Cuba-related apparent violations, $5,769,308 for Burma, $54,860,306 for Sudan, and $4,835,000 for Iran. Mitigation was extended because RBS had not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest transaction date, RBS provided substantial cooperation to OFAC, and RBS took remedial action. OFAC further reduced the proposed penalty in light of RBS' agreement to settle.

The $33,122,307 settlement obligation will be deemed satisfied by payment of an equal or greater amount by the Federal Reserve Board of Governors in satisfaction of penalties arising out of the same pattern of conduct.

RBS' settlement with OFAC is part of a global settlement also involving the Federal Reserve Board of Governors and the Department of Financial Services of the State of New York. The Federal Reserve Board of Governors separately assessed penalties arising out of the same pattern of conduct; RBS' OFAC settlement obligation of $33,122,307 will be deemed satisfied by payment of an equal or greater amount by the Federal Reserve Board of Governors in satisfaction of those penalties.

OFAC found that RBS did not maintain adequate policies or procedures to ensure compliance with the sanctions programs administered by OFAC, and that several members of management responsible for the bank's Global Correspondent Banking and Payment Operations units were aware of the conduct giving rise to the apparent violations. OFAC stated that any civil penalty should be commensurate with the seriousness of RBS' conduct in order to achieve maximum future compliance effect and deter similarly situated financial institutions. RBS received mitigation credit for taking remedial action in response to the matters described above.

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