ING Bank ‘under suspicion’ of doing business with ‘rogue’ countries. Or how the US tries to put the whole world on their legal leash.

The Dutch financial newspaper ‘Het Financieele Dagblad’ writes a story on the Dutch multinational bank ´ING Bank´, being ‘under suspicion’ of doing business with the so-called ‘rogue countries’: Cuba, Iran, Syria.

For me this story was remarkable for two reasons. Here are the pertinent snips of this story, followed by my comments:

Public prosecution US investigates ING Bank

The American public prosecution started a criminal investigation against the Dutch, Amsterdam-based multinational bank ‘ING Bank NV’. The banks is under suspicion of violating sanction-regimes against Cuba, Iran and Syria.

A source close to Dutch national bank ‘De Nederlandsche Bank’ (DNB) expects that ING Bank might be penalized to the amount of ‘a few hundreds of millions of dollars’. The bank itself states that the investigation can lead to ‘substantial penalties or other sanctions’.

The exact content of these suspicions is not disclosed. The American authorities don’t react to requests for further information. ING doesn’t want to give detailed information during the investigation. The bank does state that the question is, if transactions in these three countries took place ‘according to the applicable rules’. 

The American sanction regimes prohibit companies, that are active in the United States, to do business with countries that are enlisted as ‘rogue states’. The banks should especially be aware of dollar transactions with these countries. These transactions have to meet very strict demand.

As every international dollar transaction from everywhere in the world is settled through American banks, the US claim the right to worldwide prosecute banks that violate these rules.

ING Bank is already in the crosshairs of American law enforcement since 2006, according to annual reports of the bank. Until that year ING did business in Cuba, Iran and Syria without heavy restrictions. ING utilized the Netherlands Caribbean Bank, together with the Cuban government. But in 2006 the US became more restrictive. The Cuban ING branch came on amn American black list of businesses that were prohibited to do business with.

For me this news was remarkable for two reasons:

First: I worked from March 2008 until May 2011 at ING bank as an ICT consultant, with no connection to daily business at all. During that period, I took at least three mandatory courses on ING banking rules, in which it was specifically forbidden for all personnel to do business with Iran, Syria and Cuba in any way, whatsoever. So I hope and think that the bank has that subject covered, since 2006 .

Second: for me it is totally ridiculous, that the US claims the right to prosecute foreign banks for doing business outside the US, with these regimes.

If this business is executed by American branches of foreign banks on American home turf, American law enforcement are right to prosecute those branches. The US has, of course, the right to maintain their laws on their home ground.

But for me, it is a totally different story when a branch outside the US of a foreign bank does do business with Cuba, Iran and Syria.

To be clear:

·         Iran and Syria are definitely rogue countries, but I can name a bunch that are also:

o    Saudi-Arabia, Iraq, Afghanistan, Zimbabwe and Myanmar, to name a few. Are these regimes on that list? Or are these countries ‘too useful’ for the US?

·         Cuba is definitely a dictatorship, but not at all the worst one. Cuba has just the bad luck, that the people that fled the country, after Batista was knocked over, are an influential group in Florida and other American states. And of course: the bad memories of The Bay of Pigs still play an important role.

·         And what do you think: if Goldman Sachs would do business with Suriname or Myanmar and both countries would be under a sanction regime of the Dutch government, would GS pay €500 mln to the Dutch government? Really?!

I understand that the US is still the policeman of the world and the leading superpower and I do agree that this supplies the US with special privileges.

But:

·         Whether a country is on the US sanction list, has a lot more to do with hypocrisy, opportunism and politics, than with justifiability, fairness and true compassion.

·         It is just none of the US’ business, whether a European branch office of a European bank does do business with Cuba or not. The only situation where sanctions would be justified is, if a country is on a sanction list, composed and sanctioned by the UN Security Council. Not some unilateral list of ‘some’ country.

After having said that; I understand when ING would pay all penalties, when found guilty in a New York court of law. Because, for ING doing business in the US is just ‘too important to fail’.