RBS off US hook

The US Department of Justice is dropping a deferred prosecution against the Royal Bank of Scotland (RBS) that has been hanging over the group's American operations since 2007.

The news means the authorities in the US now believe RBS complies with banking secrecy and dollar clearing laws that have already seen it pay part of a $500m fine.

The issue goes back to the activities of the Dutch bank ABN AMRO which an RBS-led consortium took over in 2007.

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In advance of the takeover, the US authorities found that ABN had "turned a blind eye" to money laundering legislation, thereby allowing transactions by customers in Iran, Libya Sudan and Cuba.

After the takeover the consortium became liable both for the fine and for sorting out procedures at ABN under a so called "Deferred Prosecution Agreement".

On 23 December the US District Court "dismissed" RBS's obligations under that agreement.

Since the takeover, ABN AMRO's US operations have been re-named RBS N.V.

The ABN deal is seen as a significant factor in nearly bankrupting RBS which in 2008 required a nearly £40bn bail out by the British tax payer.

BS