Russian Bank Fined $9.5M by US for Violating Iran Sanctions

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RIA Novosti, PUBLISHED 29.01.2014

A large Russian bank now under state control has agreed to pay a $9.5 million fine to US regulators for violating financial sanctions on Iran, the US Treasury said late Monday.

Bank of Moscow, which is run by the government-owned bank VTB, was penalized for authorizing 69 financial transfers for an Iranian bank via the United States worth about $41 million in 2008 and 2009, the Treasury’s Office of Foreign Assets Control said in a statement.

“Bank of Moscow’s conduct resulted in significant harm to US sanctions program objectives,” OFAC said.

A spokesperson for Bank of Moscow confirmed Tuesday that the bank had carried out the transactions, but noted they were authorized by former managers, and that the relevant US sanctions on Iran were no longer in force.

The payments were made by Bank of Moscow for a Russian subsidiary of Iran’s Bank of Melli, which was subject to US sanctions put in place to limit Iran in the development of its nuclear program.

Bank of Moscow included no reference to Iran or Bank of Melli, and US financial institutions processed the transactions without manual intervention, OFAC said.

Bank of Moscow, which grew from the banking outfit for the Moscow government under the capital’s former mayor – Yury Luzhkov – into Russia’s fifth largest bank, was taken over by VTB in 2011 after a bitter struggle for control.

VTB was subsequently forced to seek a record $14 billion state bailout after it discovered an alleged black hole in Bank of Moscow's balance sheet. Former Bank of Moscow executives, who claim the cases against them are politically motivated, are currently wanted in Russia on embezzlement charges.

Topics: Russia, USA, Iran

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