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By Aruna Viswanatha and Anna Yukhananov
WASHINGTON, Dec 11 (Reuters) - Royal Bank of Scotland GroupPlc will pay $100 million to resolve U.S. probes intothe bank's dealings with Sudan, Iran, and other sanctionedcountries, U.S. authorities said on Wednesday.
Between 2005 and 2009, the bank processed around $34 millionin wire transfers that violated sanctions against Sudan, Iran,Cuba and Myanmar, the Treasury Department said, adding that $32million of that amount came from Sudan.
The bank also instructed its employees to remove referencesto the sanctioned locations from payment messages to U.S.financial institutions so that they would be processed,authorities said.
Regulators described one written policy at RBS, for example,which instructed employees that any dollar-denominated paymentcould not include: "1. The sanctioned country name. 2. Any namedesignated on the Office of Foreign Asset Control (OFAC)restricted list."
Members of the bank's management knew of the conduct, andsome, including its head of global banking for Asia, Middle Eastand Africa, were fired in connection with the probe, authoritiessaid.
In a statement, the bank said it "acknowledges and deeplyregrets these failings." The bank also said it had initiated theinvestigation, shared information with authorities, and hascommitted almost 300 million pounds ($490 million) since 2010 toimprove its sanctions controls.
Criminal authorities at the U.S. Justice Department and theDistrict Attorney of New York have closed their relatedinvestigations and will not bring charges, RBS said.
"This action demonstrates our continuing efforts toaggressively enforce U.S. sanctions laws against Iran and othersanctioned parties," Adam Szubin, who runs the TreasuryDepartment's OFAC unit, said in a statement.
The bank also entered into agreements with the U.S. FederalReserve and the New York State Department of Financial Services.
The Fed, which levied $50 million of the penalty, orderedthe bank to improve its sanctions compliance programs.
The New York bank regulator, which also levied a $50 millionpenalty, said that some $523 million in transactions were routedthrough New York correspondent banks involving Sudanese andIranian customers.
RBS instructed employees to list the name of the Iranianfinancial institution rather than its identifying codes on wiretransfers, which prevented the bank's payment system fromautomatically including references to Iran in the cover messagessent to U.S. clearing banks, regulators said.
Several UK banks have entered into settlements in recentyears over continuing financial transactions with Iran despiteU.S. laws against them, and for removing information frompayments to get them processed in the United States.
Lloyds TSB Bank Plc became the first bank to settle,forfeiting $350 million in 2009. Others to pay penalties includeCredit Suisse, Barclays, and ABN Amro, nowpart of RBS.
Standard Chartered also agreed to pay a total of$667 million in penalties last year to resolve allegations ofsimilar sanctions violations.
In that case the New York bank regulator moved beforefederal counterparts and threatened to revoke the bank's statebanking license.
