UniCredit Bank and its Italian and Austrian operations processed over $500 million through the U.S. financial system for the Islamic Republic of Iran Shipping Lines.
UniCredit Bank, based in Munich, Germany, was fined $1.3 billion for violating the International Emergency Powers Act (IEEPA) and defrauding the U.S. by processing $393 million over 10 years on behalf of sanctioned Iranian enterprises engaged in weapons development.
As part of the total penalty, the Treasury Department’s Office of Foreign Assets Control (OFAC) entered three separate agreements totaling $611 million with the following UniCredit Group banks: UniCredit Bank AG in Germany, UniCredit Bank Austria AG in Austria and UniCredit S.p.A. in Italy.
Between January 2007 and December 2011, UniCredit Bank AG processed over 2,000 payments totaling more than $500 million on behalf of the Islamic Republic of Iran Shipping Lines (IRISL) and several companies owned by or affiliated with IRISL.
“These transactions constitute apparent violations of contemporaneous sanctions programs targeting proliferators of weapons of mass destruction, global terrorism and the following countries: Burma, Cuba, Iran, Libya, Sudan and Syria,” OFAC said in a statement on Monday.
“This case is a prime example of how some institutions erroneously believe they can game the U.S. financial system and conceal their nefarious activity,” said Assistant Director in Charge William F. Sweeny of the FBI’s New York field office.
In addition, UniCredit Bank has entered into a plea agreement with the New York County District Attorney’s Office for violating New York state law pursuant to which it will pay $316,545,816. The bank also will pay the Federal Reserve and the New York State Department of Financial Services fines of $157.770 million and $405 million, respectively.
The bank and its European branches have committed to internal controls to mitigate sanctions-related risks, conducting regular audits and providing ongoing sanctions compliance training throughout the company.
The penalties against UniCredit Bank follow last week’s announcement that Standard Chartered Bank (SCB) of Britain will pay penalties in the amount of $1.1 billion for violating multiple U.S. sanctions.