A federal judge in New York sentenced one of France’s biggest banks on Friday to pay $8.9 billion in penalties for channeling massive sums of money through the U.S. financial system on behalf of parties in Sudan, Iran and Cuba in violation of U.S. economic sanctions.
BNP Paribas’ agreement to pay a huge penalty set off a process in which people who have been harmed by the sanctioned regimes are being invited to apply for compensation.
The bank pleaded guilty on July 9 to a single felony count to settle the case, marking the first criminal conviction of a foreign financial institution for violating the Emergency Powers Act and the Trading with the Enemy Act.
U.S. District Judge Lorna Schofield of the Southern District of New York sentenced the global financial institution, which is headquartered in Paris, to five years’ probation and ordered the bank to forfeit $8.83 billion. She also imposed a $140 million fine.
The Justice Department said it is exploring ways to use the forfeited funds to compensate victims of abuses by the three sanctioned governments. As a preliminary step, it invited individuals or their representatives to provide information describing the nature and value of the harm they have suffered by via the Internet page www.usvbnpp.com or phoning 888-272-5632 (within North America) or 317-324-0382 from international locations.
BNP admitted to illegally moving over $8.8 billion through the U.S. financial system on behalf of Sudanese, Iranian and Cuban entities between 2004 and 2012, though most of the transactions involved parties in Sudan from July 2006 through June 2007. The Sudanese government was put under a U.S. economic embargo due to its alleged human rights abuses and its role in facilitating terrorism.
In March 2007, the Justice Department said, a senior compliance officer at the bank wrote high-level colleagues that certain Sudanese banks in dealings with BNP “play a pivotal part in the support of the Sudanese government which ... has hosted Osama Bin Laden and refuses the United Nations intervention in Darfur.”
In addition to its federal criminal conviction, the bank pleaded guilty in New York State Supreme Court to falsifying business records.
As part of the overall settlement, the bank:
--Will pay a $2.24 billion penalty to the New York Department of Financial Services.
--Will pay a $508 million civil penalty to the Board of Governors of the U.S. Federal Reserve System.
--Agreed to fire 13 employees, including five senior executives, and discipline some 32 others, whose punishments included demotions, pay cuts or other sanctions.
--Agreed to suspend U.S. dollar-clearing operations at its U.S. affiliates for one year in its business lines where the misconduct occurred.
Another 27 employees who would have faced discipline had already left the bank when it pleaded guilty.
“BNP Paribas flouted U.S. sanctions laws to an unprecedented extreme, concealed its tracks and then chose not to fully cooperate with U.S. law enforcement,” said Leslie Caldwell, chief of the Justice Department’s Criminal Division.
She said the giant bank “deliberately disregarded the law and provided rogue nations, and Sudan in particular, with vital access to the global financial system, helping that country’s lawless government to harbor and support terrorists and to persecute its own people.”
Richard Weber, chief of the Internal Revenue Service’s criminal investigations unit, said that the sentencing “should sound the alarm to international financial institutions thinking of perpetrating these crimes.”
Weber said that the ability of law enforcement agencies “to expose blatant violations of U.S. embargoes and sanctions has changed the way financial matters are handled worldwide.”
A spokeswoman for the bank did not immediately respond to requests for comment.
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