IBK, $100 Million Fine for Violating US Anti-Money Laundering Laws

$86 Million Fine Settlement with U.S. Prosecutors and New York State Department of Financial Services for Violating the 'Iran Sanctions Act'

[Asia Economy Reporter Kwon Haeyoung] IBK Industrial Bank of Korea has agreed to pay a fine of $86 million (approximately 104.9 billion KRW) to the U.S. prosecutors and the New York State Department of Financial Services for violating the Anti-Money Laundering Act. This comes six years after the U.S. prosecutors began their investigation in May 2014.

IBK announced on the 20th (local time) that it has concluded all investigations related to the Korean won settlement transactions between Korea and Iran, which had been conducted over several years by the U.S. prosecutors and the New York State Department of Financial Services.

The reason for the sanctions was the inadequacy of the anti-money laundering program at IBK’s New York branch. IBK plans to pay the fines within the scope of the provisions already set aside. The fines amount to $51 million to the U.S. prosecutors and $35 million to the New York State Department of Financial Services.

Previously, Company A engaged in intermediary trade between Iran and third countries, and from February to July 2011, it used IBK’s Korean won settlement account to receive export payments through false transactions and then remitted U.S. dollars and other currencies overseas. Korean prosecutors also became aware of Company A’s false transactions in January 2013 and arrested and indicted its representative for violating the Foreign Exchange Transactions Act and other laws. IBK was accused of violating the U.S. Anti-Money Laundering Act during the remittance intermediary process by failing to timely detect Company A’s false transactions. The prosecutors concluded the case without finding that IBK employees conspired or condoned the crime. However, the U.S. federal prosecutors continued investigating Company A’s transactions, which led to the imposition of this fine.

IBK accepted the assessment that the anti-money laundering program at its New York branch previously did not meet U.S. legal requirements and took measures such as improving the anti-money laundering system and increasing personnel. As a result, it now has an effective anti-money laundering program, and the New York State Department of Financial Services also evaluated in the consent order signed with IBK that the anti-money laundering program at the New York branch was appropriate as of 2019.

An IBK official stated, "As a global financial institution, we will continue efforts to comply with relevant laws and regulations and to effectively improve and maintain compliance systems such as anti-money laundering by continuously consulting with domestic and international authorities."

This content was produced with the assistance of AI translation services.