On May 1, 2015, the U.S. District Court for the Southern District of New York sentenced French bank BNP Paribas S.A. (BNPP) in connection with the bank’s July 2014 plea of guilty for violations of the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). The court placed BNPP on probation for five years; the bank also will pay an $8.83 billion forfeiture and a fine of $140 million. BNPP admitted to knowingly and willfully moving more than $8.8 billion through the U.S. financial system between 2004 and 2012 on behalf of sanctioned entities in Cuba, Iran and Sudan. The implicated transactions led to more than 3,800 apparent violations of U.S. sanctions programs.
In late June 2014, BNPP agreed to a global settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and several U.S. state and federal government agencies, including the DOJ, the New York County District Attorney’s Office, the Federal Reserve Board of Governors and the Department of Financial Services of the State of New York. This month’s sentencing is part of BNPP’s agreement with DOJ to plead guilty to the IEEPA and TWEA charges and pay $8.9 billion, representing the proceeds derived from the transactions at issue. In addition to its federal criminal conviction, BNPP pleaded guilty in New York State Supreme Court to falsifying business records and conspiring to falsify business records. BNPP also agreed to a cease and desist order and to pay a civil monetary penalty of $508 million to the Board of Governors of the Federal Reserve System. The New York State Department of Financial Services announced that BNPP agreed, among other things, to terminate or separate from the bank 13 employees, including the Group Chief Operating Officer and other senior executives; suspend U.S. dollar clearing operations through its New York Branch and other affiliates for one year for business lines on which the misconduct centered; extend for two years a monitorship put in place in 2013; and pay a monetary penalty of $2.24 billion. In satisfying its criminal forfeiture penalty, BNPP will receive credit for payments it made in connection with its resolution of these related state and regulatory matters. OFAC also levied a fine of $963 million, which will be satisfied by payments made to DOJ.
This sentencing was historic, marking the first time that a financial institution has been convicted and sentenced for U.S. economic sanctions violations. The total monetary penalty is the largest ever imposed in a criminal case. Some of the forfeiture could go to individuals harmed by the three sanctioned countries under a new program announced by the Department of Justice.