Financial Transparency Coalition

U.S. Government Fails Again to Hold Individuals Accountable for Wanton Violations of U.S. Sanctions Law, Providing No Deterrent to Future Misconduct

Settlement Fits Same Mold as Previous Cases, Perpetuates “Too Big to Jail”

WASHINGTON, DC – Global Financial Integrity (GFI) expressed skepticism today that the settlement reached between the United States government and BNP Paribas SA would effectively punish the company for its systematic subversion of U.S. sanctions over a decade-long period or effectively deter similar conduct in the future.

U.S. Attorney General Eric Holder announced late on Monday that “between 2004 and 2012, BNP engaged in a complex and pervasive scheme to illegally move billions through the U.S. financial system on behalf of sanctioned entities” in Sudan, Iran, and Cuba, going “to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive U.S. authorities.” This pattern of behavior continued despite warnings by U.S. officials, opinions from reputable international law firms, and repeated statements from the bank’s own compliance officials that this conduct was illegal. According to the New York Department of Financial Services, the transactions involved totaled greater than $190 billion.

“Facilitating money laundering for oppressive, terrorist-harboring regimes has direct, real-life consequences,” said GFI President Raymond Baker, a longtime authority on financial crime. “Trade-based money laundering finances all kinds of nefarious activity. For example, there is little doubt that groups perpetrating the Sudanese genocide used this method. The United States instituted strict sanctions laws to ensure that U.S. dollars would not be used to finance this atrocity—BNP not only repeatedly broke these laws, but more importantly the money they moved may have financed genocide.”

Under the terms of its settlement, BNP will pay a fine of approximately $8.9 billion, and plead guilty to sanctions and conspiracy charges in federal and state court. Despite the egregious and persistent nature of BNP’s admitted crimes, though, no individual employee of the bank has been criminally charged for their involvement.

The settlement follows similar recent deals with Credit Suisse, HSBC, ING, UBS, Standard Chartered, and Wachovia for facilitating money laundering or tax evasion, in which the banks paid hefty fines while their executives and employees escaped any punishment for their participation. While BNP will also forfeit, for one year, the ability to clear dollar-denominated transactions by its energy and commodity finance division, this constitutes less than one percent of its business.

“Overall, the settlement is as unsurprising as it is disappointing,” noted Heather Lowe, GFI Legal Counsel and Director of Government Affairs. “While we have to give the government credit for finally prosecuting BNP Paribas— something that other countries are failing to do despite the massive amounts of illicit money travelling through the international financial system—the egregious and wanton violations of law in this case have not resulted in a settlement that will serve as a real deterrent for future crime.”

“While we appreciate BNP’s acknowledgement of their past wrongdoing, it’s simply a case of ‘too little, too late.’ BNP had multiple opportunities to excise this kind of activity from their business, and they chose not to,” continued Ms. Lowe. The only way to stop this from occurring again at BNP, or at any other bank, is for any of their employees who knowingly violated the law to face appropriate consequences for their actions.”

A bill currently pending in Congress, the Holding Individuals Accountable and Deterring Money Laundering Act, sponsored by Rep. Maxine Waters (D-CA), aims to make settlements like that in the BNP case more transparent, by requiring DOJ to explain its reasoning for not seeking individual penalties.

“There will not be substantial progress on combatting money laundering through major financial institutions until individual actors within those banks feel that they will be held accountable for their actions,” stated Joshua Simmons, GFI Policy Counsel. “’Too Big to Jail’ can’t refer to banks themselves—it has to be about the individuals within those banks who are actually facilitating the bank’s criminal activity. No one should be above the law simply because they work for a large, systemically important financial institution. Rep. Waters’ bill is a step in that direction.”

 ###

Notes to Editors:

• GFI spokespersons are available to comment on the BNP Paribas settlement.To schedule an interview with Mr. Baker, Ms. Lowe, or other GFI spokespersons, contact Joshua Simmons at +1 202 293 0740 ext. 273(office) / +1 202 731 0622 (mobile) / jsimmons@gfintegrity.org.

• Click here to read the U.S. Department of Justice’s official press release regarding the BNP Paribas case.
• Click here to read official court documents filed by the DOJ in the U.S. District Court for the Southern District of New York regarding the BNP Paribas case.
• Click here to read the New York Department of Financial Services’ official press release regarding the BNP Paribas case.
• Click here to read the official consent order filed by the N.Y. Department of Financial Services in New York state court.
• Click here for more information on the Holding Individuals Accountable and Deterring Money Laundering Act.

Journalist Contact:

Joshua Simmons
jsimmons@gfintegrity.org
+1 202 293 0740 ext.273 (Office)
+1 202 731 0622 (Mobile)