Italian banking company pays $1.3 Billion for OFAC deficiencies

The Treasury Department's Office of Foreign Assets Control and the Federal Reserve Board announced Monday that they, in coordination with actions by the Department of Justice, the Office of the U.S. Attorney for the District of Columbia, the New York County District Attorney's Office, and the New York Department of Financial Services, have imposed approximately $1.3 billion in civil money penalties and forfeitures on UniCredit, S.p.A., a foreign bank operating in the the U.S. and headquartered in Italy, and two of its subsidiaries, in connection with the firm's unsafe and unsound practices related to inadequate sanctions controls and supervision of its subsidiary banks.

In its press release, the Justice Department states that the UniCredit banks, over ten years, "knowingly and willfully moved at least $393 million through the U.S. financial system on behalf of sanctioned entities, most of which was for an entity [Islamic Republic of Iran Shipping Lines] the U.S. Government specifically prohibited from accessing the U.S. financial system. [UniCredit] engaged in this criminal conduct through a scheme, formalized in its own bank polices and designed to conceal from U.S. regulators and banks the involvement of sanctioned entities in certain transactions. [UniCredit] routed illegal payments through U.S. financial institutions for the benefit of the sanctioned entities in ways that concealed the involvement of the sanctioned entities, including through the use of companies that [UniCredit] knew would appear unconnected to the sanctioned entity despite being controlled by the sanctioned entity."