The largest bank settlement of its time, and the most Cuban one: nearly all of it is a single programme, which is not what the era’s reputation suggests.
What the notice counts
ING processed 20,452 wire transfers, trade-finance transactions and travellers’ cheques worth about $1.65 billion involving Cuba between October 2002 and July 2007. That set carried a base penalty of $636 million of the $666 million total. The rest was small by comparison:
- Burma: 41 transactions, about $15.5 million.
- Sudan: 44 transactions, about $2.0 million.
- Libya: 3 transfers, about $27,000.
- Iran: two trade-finance transactions worth about $1.36 million.
The conduct ran through ING’s commercial banking offices in the Netherlands, Belgium, France, Curaçao and Cuba, and not through its US insurance or banking operations. ING voluntarily self-disclosed everything except the Iran transaction handled by its Bucharest office.
How, according to Treasury
OFAC’s enforcement notice gives the numbers. Treasury’s press release the same day gives the methods. At the instruction of senior management, ING staff in Curaçao began in the 1990s omitting references to Cuba from payment messages sent to the United States, so US banks could not identify and stop prohibited transactions. Branches in France, Belgium and the Netherlands used the same practice for dollar payments and trade finance.
Two further stratagems are named. Senior management in France authorised, advised on the creation of, and ultimately supplied fraudulent endorsement stamps for Cuban banks to use in travellers’ cheque transactions, which disguised the Cuban banks’ involvement when the cheques were processed in the US. And the Dutch Trade and Commodity Finance business routed payments for sanctioned Cuban clients through other corporate clients to obscure their identity, while the Romanian branch left details out of a letter of credit involving a US bank that financed the export of US-origin goods to Iran. See correspondent banking abuse and front companies.
The penalty
Egregious: OFAC found the conduct marked by wilfulness and recklessness, with several employees, including senior management, aware of it, and significant harm to the programmes’ objectives. It also aggravated the penalty because ING did not consistently cooperate early with explicit requests for information. Mitigation came from the possibility that some transactions, those relating to agricultural or medical goods or large personal remittances, could have been licensed, from ING’s clean five-year record, from later cooperation including a tolling agreement with multiple extensions, and from its agreement to settle. OFAC referred the matter for criminal investigation “in light of the sheer number of apparent violations, the array of stratagems employed by ING Bank to conceal its actions, and the seriousness of the conduct.” The $619 million was deemed satisfied by the payment to the Justice Department and the New York County District Attorney, so it is not a separate bill.
What the record shows
- Policy, not a rogue desk. The practice sat in the Wholesale Banking Division’s offices in four countries and was directed from the top, according to Treasury.
- The money was Cuba. For a case remembered as a general “sanctions” settlement, 96 per cent of the base penalty is one programme. See the stripping-era note.