French bank Crédit Agricole will pay $787 million and hire an independent monitor after violating U.S. sanctions against Sudan, Iran, Myanmar, and Cuba between 2003 and 2008.
The bank will also fire a managing director involved in the violations of U.S. federal law and New York banking law.
Most other employees implicated in the offenses have already left the bank, the New York State Department of Financial Services said Tuesday.
The $787.3 million Crédit Agricole will pay in total includes $385 million to the New York State Department of Financial Services, $90.3 million to the Federal Reserve, $156 million to the Manhattan District Attorney’s Office, and $156 million to the U.S. Attorney’s Office for the District of Columbia.
A $330 million penalty imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control will be “deemed satisfied” by amounts Crédit Agricole is paying the other agencies.
From at least 2003 to 2008, Crédit Agricole processed more than $32 billion in U.S. dollar payments through its New York branch from its branches in Paris, London, Singapore, Geneva, Hong Kong, and the Arabian Gulf, on behalf of Sudanese, Iranian, Burmese, and Cuban entities.
The bank agreed to hide its clients’ identities on transactions through New York that violated U.S. sanctions.
One client described the crisis in the Darfur region of Sudan as “an exaggeration in the media.” The bank processed more than 4,000 transactions in violation of U.S. economic sanctions against Sudan.
Crédit Agricole’s Geneva employees were encouraged to complete illegal U.S. dollar transactions using a method fabricated by the bank’s anti-money laundering committee known internally as the “Sudanese U-turn exception.”
U.S. law didn’t recognize the “Sudanese U-turn exception.” But with no legal basis, the bank’s AML committee authorized its use.
Crédit Agricole also made sure Iranian transactions routed through New York didn’t mention Iran on the instructions.
The New York regulator said Tuesday,
Compliance staff in the Geneva Subsidiary’s Office of the General Secretariat published and disseminated a policy in 2006 entitled, Compliance Embargos, which listed for employees the following non-transparent steps to be taken to effect Iranian-related U.S. dollar transactions: “Transfer instruction (MT 202) sent to Bank A’s U.S. correspondent (Bank), WITH NO MENTION OF IRAN … no reference to Iran is made during this [MT 202 coverpayment] transaction.”
Similar instructions not to mention Iran in transactions routed through New York went to the bank’s head office in Paris, the London branch, and the Geneva subsidiary.
In its resolution Tuesday, Crédit Agricole entered into a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Columbia for violations of the International Emergency Economic Powers Act and the Trading With the Enemy Act.
In May this year, another French bank, BNP Paribas S.A., paid $9 billion after pleading guilty to violating U.S. sanctions against Sudan, Iran, and Cuba.
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The New York DFS consent order against Crédit Agricole is here (pdf).
OFAC’s settlement agreement with Crédit Agricole is here (pdf).
The Federal Reserve’s order against Crédit Agricole is here (pdf).
The DOJ’s release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.