April 15, 2019

UniCredit Group banks agree to pay $1.3 billion to settle sanctions violations with federal and state authorities

UniCredit Bank AG, a Munich-based bank belonging to the UniCredit Group, has pleaded guilty in the United States District Court for the District of Columbia to conspiring to violate the International Emergency Economic Powers Act (IEEPA), and to conspiring to defraud the United States by processing transactions through US financial institutions on behalf of sanctioned entities between 2002 and 2012.  According to the Department of Justice, UniCredit Bank AG “went to great lengths to help … Islamic Republic of Iran Shipping Lines evade sanctions to gain access to the US financial system,” moving at least $393 million through the US financial system on behalf of that and other sanctioned entities while concealing the involvement of those entities.  As part of the plea agreement,  which requires approval by the court, UniCredit Bank AG will pay a forfeiture of $315,545,816, and a fine of $468,350,000. 

At the same time, another bank in the UniCredit Group, UniCredit Bank Austria AG, has entered into a non-prosecution agreement with the DOJ to resolve an investigation of potential IEEPA violations. UniCredit Bank Austria will forfeit $20 million as part of the agreement; its parent bank, UniCredit S.p.A. has agreed to ensure that the bank’s obligations under the NPA are fulfilled.

In a parallel action, the Office of Foreign Assets Control of the US Department of the Treasury has announced settlements with these three UniCredit Group entities. The settlements resolve OFAC’s investigation of apparent violations of US sanctions programs involving Burma, Cuba, Iran, Libya, Sudan, and Syria, as well as sanctions that address the proliferation of weapons of mass destruction and global terrorism.  OFAC determined that between 2007 and 2011, UniCredit Bank AG managed US dollar accounts for the Islamic Republic of Iran Shipping Lines (IRISL) and affiliated companies in a way that obscured IRISL’s involvement, and allowed the bank to process over $500 million through US institutions, in apparent violation of sanctions.  OFAC found that the two other entities, UniCredit Bank Austria AG and UniCredit S.p.A. also processed payments through the US without disclosing underlying sanctioned persons or countries to the US financial institutions that served as intermediaries.  Together, the banks will pay $611 million to settle the apparent violations, which will be satisfied in part by the banks’ payment to the DOJ.

The three banks have also entered into settlement agreements with the Board of Governors of the Federal Reserve System and the New York State Department of Financial Services, to which they will pay $157,770,000 and $405 million respectively.  UniCredit Bank AG has also entered into a non-prosecution agreement with  the New York County District Attorney’s Office for violations of New York law, pursuant to which the bank will pay a fine of  $316,545,816.

DOJ press release | Non-prosecution Agreement

OFAC press release | Federal Reserve press release

Settlement (UniCredit AG) | Settlement (UniCredit Austria) | Settlement (UniCredit SpA)