BoI bans trade with Cuba after US ruling

BoI bans trade with Cuba after US ruling

Colm Kelpie

PUBLISHED 03/07/2014|00:00SHARE



US regulations are forcing Bank of Ireland to restrict 
services to

Irish customers doing business with Cuba.



The Irish Independent has seen correspondence from the lender written to

long-standing customers with legitimate business interests in Cuba

telling them it can no longer process international transactions to or

from the Caribbean island.



The ban comes as French bank BNP Paribas was hit with a $9bn (€6.5bn)

fine by the US amid allegations it violated US sanctions involving Cuba,

Iran and Sudan.



Bank of Ireland has a tie-up with a leading bank in the US which handles

all of Bank of Ireland's transactions under new European payment rules

known as the Single Euro Payments Area (SEPA)



The US lender is bound by US regulations which ban payments being made

to Cuba, Iran and Sudan, Bank of Ireland said.



Bank of Ireland confirmed that it had written to affected customers who

are doing business with Cuba explaining that it could not process

payments on their behalf.



"Our correspondent bank for all SEPA transaction is a leading US bank

who must comply with its own regulatory requirements and obligations and

to avoid a possible exposure to regulatory sanctions and penalties,"

Bank of Ireland said in a statement.



"As a result of the decision by our correspondent bank, we are not in a

position to process such transactions.



"This affects all international payments to or 
 from Cuba and also any

related 
SEPA payments."



The US government has sanctions in place against a select number of

countries including Cuba, Iran and Sudan. The EU has also had sanctions

in place against Iran and Sudan but not Cuba.



AIB declined to comment when asked by the Irish Independent if it was

facing similar problems concerning Cuba.



The Department of Finance said the decision was a commercial one for

Bank of Ireland and declined to comment further.



Bank of Ireland would not disclose the name its correspondent bank, but

said it did not have one handling euro-area payments before the

introduction of SEPA earlier this year.



It is not clear why a correspondent bank is now required for

transactions under SEPA and a Bank of Ireland spokeswoman declined to

comment further when 
asked if it had any plans to change 
this arrangement.



It also declined to say how many of its customers were affected.



French bank BNP Paribas this week pleaded guilty to two criminal charges

and agreed to pay almost $9bn to resolve accusations it violated US

sanctions against Sudan,



Cuba and Iran. In an unprecedented move, regulators banned BNP for a

year from conducting certain US dollar transactions, a critical part of

the bank's global business, in addition to the record-breaking fine.



In addition, the bank will need to prohibit all US dollar clearing as a

correspondent bank for unaffiliated third-party banks in New York and

London for two years.



The US has brought at least 22 cases against financial firms since 2009

for doing business or handling funds linked to sanctioned countries.



Penalties totalling $4.9bn have been levied against the 21 other banks

since US President Barack Obama took office.



Most of those cases targeted overseas banks, with less than $90m in

fines imposed on US firms.



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Source: BoI bans trade with Cuba after US ruling - Independent.ie -

http://www.independent.ie/business/irish/boi-bans-trade-with-cuba-after-us-ruling-30402541.html