The sanctions breaches covered a period from January 2007 to December 2011.

Banks that are part of Italy-based UniCredit have agreed to pay a $1.3 billion settlement with US authorities to resolve “apparent violations” of US sanctions against Iran and other nations. 

The US Department of the Treasury’s Office of Foreign Assets Control yesterday announced three agreements totalling $611 million with three UniCredit Group banks: UniCredit Bank AG in Germany, UniCredit Bank Austria AG in Austria, and UniCredit SpA in Italy. These form part of a wider $1.3 billion settlement involving a number of US authorities.

The agreement announcement comes a few days after UK-listed Standard Chartered agreed to pay $639 million for breaking sanctions against a number of countries including Iran, Sudan and Cuba.

UniCredit’s breaches spanned a period from January 2007 to December 2011. The bank processed more than 2,000 payments totaling over $500 million through financial institutions in the US.

During this period, UniCredit operated US dollar accounts on behalf of the Islamic Republic of Iran Shipping Lines (IRISL) and several companies owned by or otherwise affiliated with IRISL, and managed the accounts of those companies “in a manner that obscured the interest or involvement of IRISL in transactions sent to or through US intermediaries”. 

“These transactions constitute apparent violations of contemporaneous sanctions programs targeting proliferators of weapons of mass destruction, global terrorism, and the following countries: Burma, Cuba, Iran, Libya, Sudan, and Syria,” the US Treasury Department said.

“UniCredit Group banks routed transactions through the United States in a non-transparent manner, when those payments would have been blocked or rejected if their true nature had been clear, in violation of multiple sanctions programs,” Sigal P Mandelker, Under Secretary for Terrorism and Financial Intelligence, said.

“These banks have agreed to implement and maintain commitments to enhance their sanctions compliance. As the US continues to enhance our sanctions programs, incorporating compliance commitments in OFAC settlement agreements is a key part of our broader strategy to ensure that the private sector implements strong and effective compliance programs that protect the US financial system from abuse,” it said. 

As part of the settlement, the banks must put in place and observe compliance commitments to minimize the risk of such breaches recurring.