Prosecutors in the US have accused ABN Amro, now substantially part of Royal Bank of Scotland (RBS), of stripping information from letters of credit (L/Cs) and other financial instruments in order to bypass US sanctions.

They say a technique called "stripping" allowed the bank to participate in transactions with countries sanctioned by Washington such as Cuba and Iran.

Charges

Earlier this month, the consortium of RBS, the government of the Netherlands and Banco Santander that owns ABN Amro, said it would agree to a US$500 million fine as part of a final settlement with US authorities.

The US authorities had charged ABN Amro with violating the Bank Secrecy Act andconspiracy to defraud the US as well as violating laws including the Trading with the Enemy Act.

Sanctioned countries

These offences involved transactions on behalf of ABN Amro customers from Iran, Libya, Sudan, Cuba and other sanctioned countries.

According to prosecutors, ABN Amro facilitated the movement of illegal money through the US financial system by stripping information from transactions and not fulfilling its compliance obligations.

Altered documents

Offices of ABN allegedly removed or altered names and references to sanctioned countries from payment messages.

The stripping procedures were applied to several financial instruments, including L/Cs and travellers cheques.

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