Fed terminates action with RBS and its holding company over OFAC violations

A 2013 cease-and-desist consent order against The Royal Bank of Scotland Group (RBS Group) and The Royal Bank of Scotland (RBS PLC) that cited violations of Office of Foreign Assets Control (OFAC) regulations was terminated Oct. 10, the Federal Reserve Board announced in a release Tuesday.

The 2013 cease-and-desist order – signed by the Fed, holding company RBS Group, and RBS PLC – cited inadequate risk management and legal review policies and procedures for ensuring the bank’s activities at offices outside the U.S. complied with applicable OFAC regulations. It said that from at least 2005 to 2008, certain business lines within the bank “developed and implemented policies for processing U.S. dollar-denominated funds transfers through unaffiliated U.S. financial institutions involving parties subject to OFAC Regulations” that omitted information from payment messages that the U.S. institutions would need to determine whether the transactions complied with U.S. law. It also says the bank “engaged in certain other transactions that violated applicable OFAC Regulations into 2009.”

This orders cites another from 2011 among RBS Group, RBS PLC and U.S. branches, the Fed, and “various state banking agencies” regarding deficiencies in risk management and compliance at the bank’s U.S. branches relating to the Bank Secrecy Act and implementing U.S. Treasury rules, anti-money laundering requirements of the Federal Reserve Board, and applicable U.S. sanctions laws (including the International Emergency Economic Powers Act and Trading With the Enemies Act) and implementing OFAC rules. It cites a previous settlement by the bank and its holding company with OFAC.

Federal Reserve Board announces termination of enforcement action with The Royal Bank of Scotland Group, PLC, Edinburgh, Scotland and The Royal Bank of Scotland PLC

Cease-and-desist order dated Dec. 11, 2013 (PDF)