U.S. Investigates UniCredit on Iran

U.S. authorities are investigating UniCredit SpA over possible violations of trade sanctions on Iran, a person familiar with the matter said Sunday.

In a statement over the weekend, the Milan-based bank said its German unit, HVB, was being investigated by the New York County District Attorney's Office, the U.S. Department of Justice and the U.S. Treasury Department's Office of Foreign Assets Control, which is tasked with monitoring U.S.-sanctioned persons and companies.

The statement didn't specifically identify Iran as the sanctioned country in question, but the person familiar with the matter confirmed that the statement referred to Iran.

"HVB on its own initiative is conducting a broader review of its historic compliance with U.S. economic sanctions. The investigation and review are ongoing, and it would be inappropriate to comment further at this time," the statement said.

Other banks have faced similar questions about transactions for Iranian clients. Standard Chartered PLC earlier this month agreed to pay $340 million to a New York regulator to settle allegations that the bank broke U.S. money-laundering laws in handling transactions for Iranian customers.

An order of the New York State Department of Financial Services alleged that the bank illegally schemed for years to hide more than 60,000 financial transactions totaling $250 billion for Iranian clients. The bank, which earlier contested much of the allegations, had acknowledged the fine covers all of the transactions that the New York regulator alleged were illegal.

A person close to the matter has said Royal Bank of Scotland Group PLC was in negotiations with the U.S. Federal Reserve and Justice Department on whether it had complied with economic sanctions on Iran. RBS management initiated those talks, the person said. The U.K.'s Financial Services Authority also was talking to RBS, two people familiar with the matter said.

Commerzbank AG warned in a recent securities filing that it could face larger-than-expected penalties from U.S. probes of its dealings with countries including Iran, North Korea and Cuba.

UniCredit acquired HVB in 2005 and now operates the unit as UniCredit Bank AG. UniCredit in past financial disclosures said it was the target of an investigation by U.S. authorities but didn't mention sanctions against Iran.

In its first-half consolidated financial statement published on Aug. 3, the bank said: "A member of the UniCredit Group is currently responding to a third-party witness subpoena from the New York County District Attorney's Office in connection with an ongoing investigation regarding certain, persons and/or entities believed to have engaged in sanctionable conduct."

Source: Wall Street Journal