Mashreq has reached settlements with the New York Department of Financial Services (“DFS”), the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”), and the Federal Reserve Board and the Federal Reserve Bank of New York (the “Federal Reserve”). These settlements pertain to alleged conduct which involved USD transactions that primarily took place over a decade ago. Mashreq is committed to complying with all laws and regulations governing our industry and fully cooperated with these government regulators on this matter.

The terms of these settlements are as follows:

• The Bank will pay a penalty of USD 100 million to DFS. DFS determined that the Bank’s OFAC compliance program is adequate, with sufficient controls in place, and therefore did not require the Bank to engage in any further remediation. DFS also recognized the Bank’s continued cooperation and demonstrated commitment to building an effective and sustainable compliance program.
• The OFAC settlement does not include any fine or subsequent action, in part due to OFAC’s acknowledgement of the Bank’s substantial cooperation and extensive remediation of its sanctions compliance program, among other factors.
• The Federal Reserve settlement does not include any fine and acknowledges Mashreq’s commitment to compliance with U.S. law and enhancing its OFAC compliance program. The settlement requires Mashreq to submit an acceptable program to ensure compliance with OFAC regulations, in addition to conducting, on an annual basis, a risk-focused sampling of USD payments and engaging an independent third party to conduct a review of its OFAC policies and procedures. Following the Reserve Bank’s approval of Mashreq’s OFAC compliance program, Mashreq is to complete a global OFAC risk assessment.

The core conduct here was stopped by Mashreq in 2009. Subsequently, in 2015 when the Bank became aware of interest by its U.S. regulators, it immediately retained outside counsel to undertake a thorough investigation. OFAC has acknowledged in its settlement that Mashreq had intended to comply with U.S. sanctions requirements.

Mashreq has since dedicated significant resources to strengthening its compliance policies and procedures to ensure it is conducting its business in accordance with all applicable laws and regulations in the regions in which Mashreq operates.