Mashreqbank PSC, Dubai’s third-biggest bank, will pay $100 million to settle allegations that it violated U.S. sanctions by illegally processing more than $4 billion of payments tied to Sudan, Bloomberg reported quoting a New York financial regulator.
The oldest privately owned lender in the United Arab Emirates processed the transactions from 2005 to 2014 and instructed employees to leave out key details in messages sent between banks that would have linked the transactions to Sudan, according to a consent order with the New York Department of Financial Services. By concealing those details, the transactions avoided detection from other banks’ compliance departments, which otherwise could have triggered alerts or asset freezes, DFS said.
“The sanctions regulations exist to protect the national security of the United States, and Mashreq’s actions to circumvent those regulations were illegal and dangerous and will not be tolerated in an institution that has enjoyed the benefits of doing business in New York,” said Adrienne Harris, the regulator’s acting superintendent.
After news broke in 2009 that a Swiss bank used by Mashreq was under investigation, the Dubai lender closed all U.S. dollar accounts held by Sudanese banks. But Mashreq didn’t disclose the prohibited transactions to New York’s regulator, as required by regulations, until 2015, DFS said. From 2010 to 2014, Mashreq’s New York Branch processed another $2.5 million in Sudan-related payments.
As part of the accord, the bank will provide a report on its anti-money laundering policies and procedures to DFS, which acknowledged the bank’s “substantial cooperation.” The Treasury Department’s Office of Foreign Assets Control and the Federal Reserve Board also reached settlements with the bank.
“Mashreq is committed to complying with all laws and regulations governing our industry and has been fully cooperating with its government regulators on this matter,” a spokesperson for the bank said in an emailed statement.
The U.S. imposed sanctions on Sudan in 1997 for supporting international terrorism and human rights abuses
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