UniCredit nears $900mn sanctions agreement with US

Bloomberg

UniCredit SpA is nearing an agreement with US authorities over allegations that the bank provided dollar-clearing services to Iranian clients in violation of US sanctions, people with the knowledge of the matter said. The deal would cost the Italian lender about $900 million but spare it from criminal prosecution, the people said.
A settlement of that size would be one of the largest for violations of US sanctions laws, exceeded only by agreements reached with Societe Generale SA, Commerzbank AG, HSBC Holdings Plc and BNP Paribas SA.
Among them, only BNP Paribas admitted guilt. The others entered into deferred-prosecution agreements.
A deal is expected in the coming weeks, the people said. It would resolve investigations of UniCredit by the US Justice Department, the Treasury Department’s Office of Foreign Assets Control, the Federal Reserve, the Manhattan district attorney’s office and New York’s Department of Financial Services.
Representatives from those offices declined to comment or didn’t immediately respond to messages.
A UniCredit spokesman declined to comment.
UniCredit’s German unit, HypoVereinsbank, was subpoenaed in March 2011 by the New York district attorney’s office over transactions with certain Iranian entities that were subject to US sanctions. The lender set aside $831 million in provisions and charges, including funds to eventually settle the allegations in the third quarter. Additional funds were provisioned by HVB in the first half, according to the unit’s financial report.
UniCredit has declined to disclose the total amount of provisioning related to the sanctions. The bank’s provisions for the settlement are expected to fully cover the fine, one of the people familiar with the matter said.
Italy’s biggest bank, UniCredit is one of several European financial institutions settling cases for alleged sanctions-busting. Fifteen European banks have paid more than $18.5 billion over the last 15 years for violating US sanctions on certain countries, particularly Iran. BNP Paribas’ $8.97 billion penalty in 2014 was by far the largest.
Standard Chartered Plc may also be getting close to settling allegations that it violated Iran sanctions. It agreed to a short extension of its non-prosecution agreement with supervising authorities to “allow for additional time to resolve the outstanding investigation into our historical US sanctions compliance.”