France's largest bank to pay USD 8.97 bln in penalties to US

France's largest bank BNP Paribas will pay a record USD 8.97 billion in penalties to settle charges that it "knowingly and willfully" processed transactions worth billions of dollars on behalf of Cuban, Sudanese and Iranian entities that had been blacklisted.

BNP Paribas (BNPP), the global financial institution headquartered in Paris, agreed to enter a guilty plea to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA), the first time a global bank has agreed to plead guilty to large-scale, systematic violations of US economic sanctions.

The plea agreement, subject to approval by the court, provides that BNPP will pay total financial penalties of USD 8.97 billion, including forfeiture of USD 8.83 billion and a fine of USD 140 million.

"BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive US authorities. These actions represent a serious breach of US law," US Attorney General Eric Holder said.

"Sanctions are a key tool in protecting US national security interests, but they only work if they are strictly enforced. If sanctions are to have teeth, violations must be punished.
Banks thinking about conducting business in violation of US sanctions should think twice because the Justice Department will not look the other way."

Manhattan's top federal prosecutor Preet Bharara said BNPP "banked on never being held to account for its criminal support of countries and entities engaged in acts of terrorism and other atrocities."

He said the world's fourth largest bank will pay penalties for "performing the hat trick of sanctions violations, unlawfully opening the doors of the US financial markets to three sanctioned countries, Sudan, Iran and Cuba.

"For years, BNPP provided access to billions of dollars to these sanctioned countries, as well as to individuals and groups specifically identified and designated by the US government as being subject to sanctions. The bank did so deliberately and secretly, in ways designed to evade detection by the US authorities," Bharara said.

According to documents, over the course of eight years, BNPP "knowingly and willfully" moved more than USD 8.8 billion through the US financial system on behalf of Sudanese, Iranian and Cuban sanctioned entities, in violation of US economic sanctions, including more than USD 4.3 billion in transactions involving entities on whom the US had slapped economic curbs. 

The New York County District Attorney's Office also announced that BNPP pleaded guilty in New York State Supreme Court to falsifying business records and conspiring to falsify business records.

In addition, the Board of Governors of the Federal Reserve System said the bank has agreed to a cease and desist order, take certain remedial steps to ensure its compliance with US law in its ongoing operations, and pay a civil monetary penalty of USD 508 million.

The bank has also agreed to terminate or separate from the bank 13 employees, including the Group Chief Operating Officer and other senior executives, suspend US dollar clearing operations through its New York Branch and other affiliates for one year for business lines on which the misconduct centered.