BNP Paribas Fined for Illegal Transactions with Cuba

bnp

According to the Miami Herald, the largest bank in France, BNP Paribas, disguised $1.75 billion in illegal transactions with Cuban entities “as part of a long string of violations of U.S. sanctions that brought it a record $8.9 billion in forfeitures and fines.” The U.S. Justice Department announced an agreement with BNP for the bank to forfeit $8.83 billion and pay a $140 million fine for violating U.S. sanctions on the three countries from 2000 to 2010. See full article in the link below:

A prosecution document on the case said BNP already has corrected its ways, “including terminating all business and prohibiting new business in any currency with sanctioned entities” in Cuba, Iran and Sudan.

It was not clear how the case would impact Cuba, already restricted by the U.S. embargo and U.S. laws and regulations on money laundering and terrorism financing. BNP shuttered its Havana office last year, after it came under U.S. investigation. “This is a very important bank, but it doesn’t mean other banks won’t be able to do transactions,” said Luis F. Luis, a former chief economist at the Organization of American States who follows Cuban banking.

The U.S. Justice Department on Monday announced an agreement with BNP, under negotiation for several months, for the bank to forfeit $8.83 billion and pay a $140 million fine for violating U.S. sanctions on the three countries from 2000 to 2010. The bank pleaded guilty to criminal charges in New York State and is expected to plead guilty to federal charges within a few weeks.

BNP officials knew and approved of repeated violations by leaving out the names of the sanctioned countries from transactions sent to the bank’s New York office, according to the 36-page “Statement of Fact” filed by U.S. prosecutors in New York.

[. . .] Bank employees “directed that transactions involving Cuba omit references to Cuba in payment messages” to hide them from U.S. watchdogs, it said. And after three transfers in 2006 were blocked because they mentioned Cuba, BNP resubmitted them without mention of Cuba and through different U.S banks. “From at least 2000 up through and including 2010, BNP, through its Paris headquarters, conspired with numerous Cuban banks and entities as well as financial institutions outside of Cuba to provide U.S. dollar financing to Cuban entities in violation of the U.S. embargo,” the document added.

The use of such large quantities of U.S. dollars in the BNP deals is surprising because Cuban banks generally use euros to avoid U.S. blocks, said a former Havana banker who defected in 2005 and asked to remain anonymous because he still has family in Cuba. Although the Statement of Fact did not identify the enterprises involved in the violations, it included several examples of illegal “Cuban Credit Facilities” that showed they covered a broad range of Cuban government financial and commercial activities.

One of the facilities involved U.S. dollar loans to a company in Netherlands to finance the company’s purchase of crude oil products that were to be refined in and sold to Cuba, according to the document. [. . .]

For full article, see http://www.miamiherald.com/2014/07/02/4215549/french-bank-handled-17-billion.html#emlnl=The_Americas

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