U.K. Bank Penalized for Violating U.S. Economic Sanctions; U.S. Banks May Want to Consider Protective Actions


Recent press reports detailing large penalties paid by a U.K. bank in connection with its violations of U.S. restrictions on financial dealings with Iran and Sudan underscore the cost of the violations - in both financial and public relations terms - to a financial institution caught in such circumstances. Similar, although apparently less egregious, actions by ABN AMRO were penalized in 2005. While these kinds of actions are presumably not common, U.S. banks that routinely clear offshore transactions through correspondent accounts held by other banks, or that have overseas branches or affiliates, may want to consider protective measures to guard against such violations.

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