Crédit Agricole fined $787.3m for US sanctions violations

Crédit Agricole Corporate and Investment Bank (CACIB) has agreed to pay fines totalling $787.3m, to dismiss a managing director, and employ a compliance consultant for 1 year for violating US sanctions. Of the total figure, $385m is owed to the New York State Department of Financial Services, $156m each to the US Attorney’s Office for the District of Columbia and the New York County District Attorney’s Office under deferred prosecution agreements, and $90.3m as a civil penalty issued by the Board of Governors of the Federal Reserve System.  A fine of $329.5m levied by OFAC, to be paid in settlement of CACIB’s civil liability, will be deemed satisfied by payments in that amount as part of the $787.3m owed to the other US authorities (settlement agreement here).   CACIB will be subject to criminal prosecution if it fails to terminate its unlawful activity and comply with the terms of the two deferred prosecution agreements.

In its press release, the US Department of Justice, which was involved in the joint investigation into CACIB’s conduct, states that between August 2003 and September 2008 CACIB “knowingly and wilfully moved approximately $312m through the US financial system on behalf of sanctioned entities located in Sudan, Burma, Iran, and Cuba” using “deceptive practices that concealed the involvement of banks designated as Specially Designated Nationals and other corporate entities”.  By omitting references to US-sanctioned parties in certain payment messages, CACIB prevented US financial institutions from reviewing the transactions for compliance with OFAC regulations.

In respect of the size of the fine, which contrasts with the fine of $8.79bn paid by BNP Paribas in connection with its own sanctions violations (see previous blog), US Attorney for DC Channing Phillips noted that the “majority of the unlawful conduct occurred at a foreign subsidiary that no longer exists” and “CACIB moved quickly to end these unlawful transactions and fully cooperated with investigations”, though he added that none the less “there will be significant consequences for any financial institution that allows its foreign subsidiaries that do not intend to respect US law to…access the US financial system”.

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About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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