BNP Paribas Accepts Its $9 Billion Fine
7/10/2014 5:37:00 AM,
MANHATTAN (CN) - Paris-based BNP Paribas bank pleaded guilty Wednesday to conspiring to violate U.S. sanctions by dealing with "rogue nations," including Sudan, Cuba and Iran, and agreed to pay a record-breaking $9 billion fine.
The guilty plea came a week after the world's fourth-largest bank pleaded guilty to similar charges in New York County Supreme Court.
It is the first time a financial institution has agreed to plead guilty to "large-scale, systematic violations" of U.S. economic sanctions, the U.S. Attorney General's Office said.
U.S. District Judge Lorna G. Schofield on Wednesday accepted the one-count guilty plea for violations of the International Emergency Economic Powers Act and the Trading with the Enemy Act.
"The defendant's actions not only flouted U.S. foreign policy, but also provided support to governments that threaten both our regional and national security," Schofield said after accepting the guilty plea Wednesday. "And in the case of Sudan, a government that has committed flagrant human rights abuses and has known links to terrorism.
"I find that the severity of the defendant's conduct more than warrants the criminal charge to which it has pleaded. The forfeiture amount will surely have a deterrent effect on others that may be tempted to engage in similar conduct, all of whom should be aware that no financial institution is immune from the rule of law," Schofield said.
The $8.9 billion penalty includes forfeiture of $8.8 billion, plus a $140 million fine. The bank also agreed to cooperate with U.S. authorities and faces 5 years of probation. Schofield set sentencing for Oct. 3.
BNP agreed in late June to plead guilty to the charges of conspiring to process more than $8.8 billion in transactions for citizens of those countries through the U.S. financial system.
The United States accused them of providing "dollar clearing services" through "satellite banks" that allowed citizens from those three countries to "gain illegal access to the U.S. financial system."
"In doing so, BNPP deliberately disregarded U.S. law of which it was well aware, and placed its financial network at the services of rogue nations, all to improve its bottom line. Remarkably, BNPP continued to engage in this criminal conduct even after being told by its own lawyers that what it was doing was illegal," the Department of Justice said in a statement.
"BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks and deceive U.S. authorities," Attorney General Eric Holder said when the decision to plead guilty was first announced. "Banks thinking about conducting business in violation of U.S. sanctions should think twice because the Justice Department will not look the other way."
Added Deputy Attorney General James M. Cole: "BNP ignored U.S. sanctions laws and concealed its tracks. And when contacted by law enforcement it chose not to fully cooperate."
According to documents made public at the time of the initial announcement of the guilty plea, for eight years BNPP moved more than $8.8 billion through the U.S. financial system on behalf of sanctioned countries, including more than $4.3 billion in transactions involving entities that were specifically cut off.
From 2004 to 2012, the bank routed illegal payments through third-party financial institutions, and instructed banks not to mention names of the sanctioned entities in payments messages to allow the funds to pass through the U.S. financial system undetected.
BNPP pleaded guilty to falsifying business records and conspiring to falsify business records in New York State Supreme Court last week. The Federal Reserve System also sought to have the bank pay a civil penalty of $508 million.
Most of the payments were made to sanctioned entities in Sudan, which is the subject of a U.S. embargo because of that government's role in "facilitating terrorism and committing human rights abuses," officials said.