On 30 June, the US government announced that BNP Paribas SA (“BNP”), a global bank based in France, agreed to plead guilty to criminal charges and pay a total of $8,973.6 million in criminal and civil fines, penalties and forfeitures for violations of US sanctions laws. This represents the largest monetary penalty ever imposed in the US for sanctions violations.
The penalties cover 3,897 apparent sanctions violations by BNP over an eight year period involving the removal of identifying information of sanctioned persons from SWIFT payment messages denominated in US Dollars and set to US financial institutions, a practice that has come to be known as “wire stripping”. This wire stripping reportedly involved omitting references to sanctioned parties, replacing the names of sanctioned parties with BNP’s name or a code word and structuring payments to avoid identifying the involvement of sanctioned parties.
The investigation of these activities involved multiple federal and New York state agencies, including the Department of Justice’s Criminal Division, US Attorney’s Office for the Southern District of New York and Federal Bureau of Investigation; the Treasury Department’s Office of Foreign Assets Control (“OFAC”) and Internal Revenue Service Criminal Investigation unit; the Board of Governors of the Federal Reserve System (“FRB”); the New York County District Attorney’s Office; and the New York State Department of Financial Services (“DFS”). In addition to monetary penalties, the FRB imposed a cease and desist order, and DFS demanded and obtained the dismissal of 13 bank employees and imposed a one-year suspension of US dollar clearing operations through New York for certain BNP business lines.