Lloyds and US Treasury settle for $217m on Iran sanctions violations

The US Treasury’s Office of Foreign Assets Control (OFAC) has announced a $217 million settlement with Lloyds TSB over compliance violations relating to wire transfers with Iranian, Libyan and Sudanese customers. The federal government resolution follows a $350 million settlement between Lloyds and Manhattan District Attorney Robert Morgenthau in January 2009 for the same violations.
   
The government says the UK bank – 43% state-owned and renamed Lloyds Banking Group since its 2009 HBOS merger – was engaged in the “intentional manipulation and deletion of information about US sanctioned parties in wire transfer instructions routed through third-party banks located in the United States”.

The Treasury settlement focuses on wire transactions made between June 2003 and August 2006, totalling $37 million within 4,281 electronic funds transfers, in apparent violation of the International Emergency Economic Powers Act and OFAC regulations related to Iran, Sudan and Libya.

However, the Treasury statement says the sanctions violations stem from a policy started in the 1990s of intentionally altering and deleting information about US sanctioned parties in wire transfer instructions to evade OFAC rules.

The settlement stipulates that Lloyds should conduct annual reviews of its sanctions policies, procedures and a statistically significant sample of its US dollar payments. The reviews, to be conducted with a third party and under UK Financial Services Authority oversight, will determine whether any payments subject to Treasury sanctions rules are processed through, or on behalf of, any US individual or entity.