The U.S. government settled an international investigation and threatened prosecution against ING Bank N.V. in a case highlighting the international nature of modern banking as well as governmental investigations and regulatory enforcement.  The U.S. passed laws prohibiting trade with certain countries.  Two statutes embodying those prohibitions are the Trading with the Enemy Act and the International Emergency Economic Powers Act, both found in Title 50 of the U.S. Code.  Among the nations that are currently on the prohibited list are Iran, North Korea, certain parts of Sudan, Syria, Cuba, and Burma.

In a Settlement Agreement containing an agreed Factual Statement, ING and the U.S. government detailed conduct occurring over a decade whereby the bank not only engaged in or facilitated transactions involving several countries on the prohibited list; it also appears that steps were taken to hide the participation by the bank in those transactions.  The Agreed Statement also includes an excerpt from the ING Legal Department stating:

we have been dealing with Cuba … for a lot of years now and I’m pretty sure that we know what we are doing in avoiding any fines … So don’t worry and direct any future concerns to me so that we can discuss before stirring up the whole business.

The Factual Statement identifies transactions of approximately $1.6 billion that were allegedly improper.

The bank and the U.S. government entered into not just the Settlement Agreement but also a Deferred Prosecution Agreement that includes applying OFAC sanctions list to the same extent as any U.N. or EU sanctions or freeze list; “not knowingly undertak[ing] any USD cross-border electronic funds transfer or any other USD transaction for, on behalf of, or in relation to any person or entity resident or operating in, or the governments of”, any of the prohibited countries; and continuing extensive training and education efforts.  The bank agreed to pay $619 million in sanctions.

On an unrelated topic, but still one of interest to international litigation, we have addressed the need for proper corporate or contract drafting to account for changes in regimes or changes of control (see our discussion here, for example, relating to the successorship issue in the sovereign immunity context).  In this regard note the following paragraph in the Deferred Prosecution Agreement:

Sales or Mergers:  ING Bank agrees that if it sells, merges, or transfers all or substantially all of its business operations or assets as they exist as of the date of this Agreement . . . during the term of this Agreement, it shall include in any contract . . . a provision binding the purchaser/successor/transferee to the obligations described in this Agreement.