Royal Bank of Scotland (RBS) has come under scanner by the US and UK regulatory authorities for having possibly breached sanctions on Iran, joining Standard Chartered which has already been penalised with heavy fine of $340 million by the New York state’s Department of Financial Services for transactions involving Tehran.
The part-nationalised British bank is under inquiry by the Federal Reserve and Department of Justice after volunteering information to them and UK regulators about 18 months ago under the leadership of its chief executive Stephen Hester.
RBS’s ongoing internal review has seen the departure of a risk manager and led to internal criticism over control of the bank’s regional compliance units. The inquiry marks the latest blow for RBS following a series of mishaps including an IT failure, widespread mis-selling of retail and small-business products and its involvement in the scandal over the alleged manipulation of Libor interest rates.
The bank has been under intense scrutiny by US and UK authorities over perceived governance and risk-control deficiencies for several years. Last year, it signed an agreement with US authorities that forced it to improve its compliance with bank secrecy and anti-money laundering laws.
RBS also agreed to pay $500 million in fines as part of a settlement with the DoJ two years ago in which it admitted that ABN Amro, the Dutch lender it bought in 2007, had willfully and systematically violated US sanctions against Iran, Libya, the Sudan and Cuba.