The Bank of Tokyo – Mitsubishi UFJ has agreed to pay the State of New York $250 million in connection with sanctions violations. Reuters’ Karen Freifeld reports that the bank deleted key details from about $100 billion worth of wire transfers that were made with Iran and other countries that have been sanctioned.
Details On The Sanctions Violations:
U.S. authorities would typically use the type of information deleted by the Bank of Tokyo – Mitsubishi UFJ to track the transactions that were made with sanctioned countries. The bank handled about 28,000 transactions with sanctioned countries which moved through New York State between 2002 and 2007. U.S. officials typically track transactions made with countries like Iran, Myanmar, Sudan and entities which have been linked with them.
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How Transactions Are Tracked:
Any transactions that are made with sanctioned countries are automatically flagged by wire transfer systems so that authorities can review them. However, Bank of Tokyo – Mitsubishi UFJ told its employees how to remove key information from the transactions so that authorities would not be able to review them.
The bank is owned by Mitsubishi UFJ Financial Group Inc (NYSE:MTU) (TYO:8306), which said it discovered what the bank was doing in 2007 and reported it to officials before stopping the stripping of information from the transfers. The company also said it cooperated with the investigation.
Bank of Tokyo Sanctions:
Bank of Tokyo – Mitsubishi UFJ is the biggest company to settle in connection with laws dealing with sanctions. Last year the U.K. bank Standard Charter plc (LON:STAN) also paid a settlement in connection with similar transactions. The bank paid the State of New York $340 million in connection with transactions that were linked to Iran and other countries that had been sanctioned. The bank also paid $327 million to other agencies in the U.S. to settle charges that were similar to those in New York.
HSBC Holdings plc (NYSE:HBC) (LON:HSBA) paid almost $2 billion to the DoJ in connection with sanctions violations. Bank of Tokyo – Mitsubishi UFJ also paid a separate $8.57 million settlement with the U.S. Treasury Department in December.
Shares of Mitsubishi UFJ Financial Group Inc (NYSE:MTU) (TYO:8306) fell as much as 3 percent at the New York Stock Exchange after the announcement of the settlement.