ING agreed a $ 619m settlement with US agencies in relation to the investigation into compliance with U.S. economic sanctions and U.S. dollar payment practices until 2007. Despite ING provisioned for this in 1Q12, a large amount of cash leaves the company and is not likely to be received with applause.
ING entered into a Settlement Agreement with U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) and Deferred Prosecution Agreements with the Department of Justice, the United States Attorney's Office for the District of Columbia and the District Attorney of the County of New York in relation to the investigation into compliance with U.S. economic sanctions and U.S. dollar payment practices until 2007. Under the terms of the Deferred Prosecution Agreements, no further action will be taken against ING Bank if it meets the conditions set forth in the agreements. ING from its part will pay a total penalty of $ 619m. As announced on 9 May 2012, ING Bank took a provision in 1Q12 to cover this issue. ING reminds that it previously these discussions with authorities, which concern compliance with OFAC requirements in relation to transactions executed by Commercial Banking.
The news does not come as a surprise, partially because ING in 1Q12provisioned to cover this issue, but also due to the fact that ABN Amro faced charges “for breach of compliance” that ended up with a payment of a $ 80m fine and $ 500m court settlement. However, the deal leads to a large amount of cash leaving the company and is therefore unlikely to be received with applause by the market.