(Adds details of settlement, Bank of America comment)
By Aruna Viswanatha
WASHINGTON, July 24 Bank of America Corp's
banking unit agreed to pay $16.6 million to resolve
allegations that it processed several hundred transactions for
drug traffickers who are subject to U.S. sanctions, the U.S.
Treasury Department said on Thursday.
The bank processed around $91,000 in transactions for six
designated narcotics traffickers between 2005 and 2009, and
failed to file timely reports on accounts owned by four others,
the department's Office of Foreign Assets Control (OFAC) said.
Bank of America spokesman Lawrence Grayson said the
settlement concluded a matter the bank addressed in 2009 by
improving its sanctions-related systems and controls.
In announcing the settlement, OFAC said it determined that
79 transactions the bank processed after October 2006
constituted an "egregious" case, because the bank knew of a
problem with its screening tool, but didn't fix it until more
than two years later.
OFAC said the bank could have faced a penalty larger than
$83 million, but that it reduced the penalty because of the
bank's efforts to fix its problems, and because some of the
transactions might have been eligible for an OFAC license.
Global banks have paid huge sums in recent years over
allegations that they violated U.S. sanctions. Most recently,
BNP Paribas agreed to pay $8.9 billion to resolve
criminal and civil charges that it violated U.S. sanctions on
Sudan and other countries.
(Additional reporting by Peter Rudegeair in New York; Editing
by Susan Heavey and Nick Zieminski)