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Business Intelligence: Royal Bank of Scotland

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        Historically countries have grappled with illegal commercial activities such as drug trade, terrorism among others. In the United states blacklisted certain countries and therefore United States firms or individuals are not allowed to transact any business with them. Those countries have been imposed with trade embargos and sanctions to curb the illegal activities for which they have been blacklisted. Some of the countries like Sudan, Cuba and Iran have been sanctioned for funding terrorist activities (Rouse, 2009). To control the financial transactions with these countries the United States has enacted certain regulations that financial institutions must adhere to. Non compliance with these laws may attract heavy fines or other sanctions to the institutions or individuals violating such regulations. This paper will analyze how one of these laws has been implemented and on what ground was the financial institution in question sanctioned.

        In 20l0, Former ABN Amro Bank N.V. (now the Royal Bank of Scotland N.V) agreed to forfeit $500 million in connection with conspiracy to defraud the United States and with violation of the bank secrecy act (, 2015). The bank secrecy act was enacted in 1970 to help curb money laundering activities. This act is also known as Currency and Foreign Transactions Reporting Act. Some of the major components of this law included a requirement that all financial institutions works closely with the federal government in case of transactions that may be suspicious. An example of such a transaction could be cash transfers of more than $ 10,000.This act was in two parts (, 2015). Title 1 was dealing with financial record keeping while Title 2 dealt with reports of currency and banks transactions overseas. Title 1 empowered the treasury secretary sectary to come up with regulation that could oblige all insured financial institutions to maintain certain records. Title 2 gave power to treasury to come up with regulations governing transactions of more than $ 10,000.

        The major intention of this law was to prevent or at least make it difficult to launder money into, out of or within the United States of America. It was also to protect banks from becoming accessories in the illegal transactions such as drug trade, terrorism or trading with oppressive regimes all across the world. Despite this good intention of the law several banks since then have found away to go around these regulations to make more profits (Rouse, 2009).  This law is enforced by financial crimes enforcement network (FinCen).These institutions attracted huge fines and other sanctions when they were detected. ABN Amro Bank N.V was one of those institutions in 2010.

        ABN Amro Bank N.V was charged with breaking three of the regulations governing the financial transactions and money laundering. The regulations violated by the institution included the banking secrecy act mentioned above along with the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). According to assistant Attorney General Breuer (, 2015) ABN failed to monitor the illegal transactions passing through their networks in the United States. In order to benefit from these illegal transactions, ABN even manipulated the information they gave to the US authorities. This proved that these illegal transactions were happening with the full knowledge of the ABN Amro Bank N.V.

        In the United States according to the banking secrecy act it is imperative for all financial institutions to monitor the origin of their funds and report any suspicion to the federal government authorities. In the case of ABN this mandatory requirement was not adhered to. According to us attorney Machen (, 2015), the institution also aided individuals and sanctioned countries in abating United States regulations. That is, they facilitated transactions approximated at millions of dollars to sanctioned countries and to countries on the list of those that support terrorism. According to the documents privy to the courts, ABN removed some crucial information in regard to these questionable transactions and also when processing checks and other bills of trade information such as destination of these funds were altered. These irregularities by the ABN catalyzed the flow of money from the United States to these sanctioned countries. These alterations also made it possible for ABN to pass through the financial filter system of the government without detection. These violations are reported to have taken place between 1995 and 2006, a period of a little more than ten years (, 2015).

        In response to these charges the ABN accepted responsibility for its conduct agreed to pay penalties for the damages caused by its conduct. The penalties totaled roughly $ 500 million. They also agreed to continue cooperation with United States government to prevent any future rift between the parties involved. From the description above the secrecy law is clearly not fraud proof considering the length of time these transactions took place? It is also regrettable that financial institutions as large as the ABN would move to such extents to make more profits. It shows the greed in which some of the banking executives are engulfed make them open to crime. In this regard stiffer penalties should be devised that touch also only individuals who perpetrate these violations.

        Finally this law was intended to curb drug trafficking and terrorism and without cooperation from these institutions the people of United States at a state of vulnerability to drug trafficking and terror attacks. These finances may also end up in the hands of rebels and rogue governments fuelling violence in those areas. There must be increased effort in the fight against money laundering and stiffer penalties must be prescribed for violators.

References,. (2015). Regulatory Releases. Retrieved 19 May 2015, from,. (2015). Former ABN Amro Bank N.V. Agrees to Forfeit $500 Million in Connection         with Conspiracy to Defraud the United States and with Violation of the Bank Secrecy Act         | OPA |         Department of Justice. Retrieved 19 May 2015, from        amro-bank-nv-agrees-forfeit-500-million-        connection-conspiracy-defraud-united



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