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Korean lender agrees to pay US$86 mln in penalties to U.S. over Iran transactions

All News 09:51 April 21, 2020

SEOUL, April 21 (Yonhap) -- South Korean lender Industrial Bank of Korea said Tuesday that it has agreed to pay penalties totaling US$86 million to the U.S. authorities in a settlement that ended a yearslong U.S. probe into illegal U.S. dollar payments from South Korean entities to Iranian ones.

The IBK said it will pay a $51 million penalty to U.S. prosecutors and a $35 million penalty to the New York State Department of Financial Services over its lack of an anti-money laundering program at its branch in New York.

Geoffrey S. Berman, the U.S. Attorney for the Southern District of New York, said IBK's branch in New York failed to detect and report $10 million in illegal U.S. dollar payments from South Korean entities to Iranian ones, as the bank failed to institute an effective anti-money laundering program.

This file photo shows Industrial Bank of Korea's headquarters building in central Seoul. (Yonhap)

"Banks conducting business in the U.S. have a responsibility to ensure that they establish safeguards against the exploitation of the banking system by sanctioned entities that foster, promote, or engage in terrorism," Berman said in a statement posted on the website of the U.S. Attorney's Office for the Southern District of New York.

Berman said assuming IBK's continued compliance with the agreement, the U.S. government has agreed to defer prosecution for a period of two years, after which time the U.S. government will seek to dismiss the charges.

IBK said it "will continue to make efforts to effectively improve and maintain its compliance system, including anti-money laundering, in consultations with relevant domestic and foreign authorities."


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