RBS investigated by United States

THE Royal Bank of Scotland is being investigated in the United States for possible breaches of sanctions with Iran, it emerged yesterday.

The Federal Reserve and Department of Justice in America are looking at potential infringements after RBS volunteered information to US and UK regulators around 18 months ago.

The investigation came to light just a week after Standard Chartered agreed a $340 million (£217m) settlement with regulators over allegations that it hid $250 billion (£160bn) of transactions with the Iranian government.

Taxpayer-funded RBS discovered possible breaches as a result of an internal review launched by chief executive Stephen Hester soon after he joined the bank three years ago.

It is thought the bank’s own internal inquiries have already led to the departure of a senior risk manager.

Regulators are said to be examining a number of banks across the world amid suggestions that illicit dollar transactions were made with Iran ahead of the introduction of strict rules in the US in 2008.

The United States first imposed sanctions on Iran more than 30 years ago but has tightened them in recent years as it tries to stifle Tehran’s nuclear programme.

Standard Chartered was accused by the New York State Department of Financial Services (DFS) of keeping around 60,000 transactions secret from US regulators over nearly 10 years.

But Standard, which employs 2,100 staff in the UK, maintained that it “strongly rejects” the portrayal by the DFS despite agreeing a settlement. The RBS investigation is thought to centre on far smaller, potential breaches. However, it deals yet another blow to the group recovering from an embarrassing IT failure, mis-selling of retail and small business products and, more recently, involvement in a US legal case on alleged rigging of the Libor interbank rate.

RBS declined to comment last night. But its half-year results report, published earlier this month, said that it had “initiated discussions with UK and US authorities to discuss its historical compliance with applicable laws and regulations, including US economic sanctions”.

Cathy Jamieson, the Labour MP, commented: “This is very disappointing news.

“It is early days and we must remember that there has been no outcome to the on-goinginvestigation.

“However, if there has been a breach then we expect RBS to fully co-operate with the regulators, and ensure that in future they properly abide by the sanctions in place.”