Five months after French bank Societe Generale agreed to pay $1.3 billion to resolve criminal and civil charges in the United States and France for bribing Gaddafi-era Libyan officials and manipulating the Libor interest rate benchmark, on Monday the third-largest French bank did it again when it settled its longstanding sanctions violations case with U.S. authorities, entering a deferred prosecution agreement with federal prosecutors and agreeing to pay another $1.3 billion to New York and Washington regulators.
As part of the settlement, SocGen acknowledged violations of U.S. sanctions laws against Iran, Sudan and Cuba starting as far back as 2003 and extending to 2013, according to Bloomberg. According to a consent order filed by New York’s Department of Financial Services, the bank executed more than 2,600 outbound payments during this period, valued at about $8.3 billion, in violation of U.S. sanctions laws.
In a statement, the NY Fed said that the bank agreed to pay $1.34 billion in all to resolve the settlement. In addition to paying $717 million to the US DOJ, the bank will pay $420 million to New York’s Department of Financial Services, $163 million to the Manhattan District Attorney’s office, $81 million to the U.S. Federal Reserve and $54 million to the U.S. Treasury.
“Societe Generale has admitted its willful violations of U.S. sanctions laws -- and longtime concealment of those violations -- which resulted in billions of dollars of illicit funds flowing through the U.S. financial system,” said U.S. Attorney Geoffrey S. Berman in Manhattan, which announced the settlement.
“Other banks should take heed: Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this office and our partner agencies.”
Quoted by Bloomberg, Maria Vullo who leads the Department of Financial Services, said: "The absence of an effective, global sanctions-compliance infrastructure and lack of management oversight allowed Societe Generale employees to ignore the scope and applicability of laws governing economic sanctions."
And now attention once again turns to Deutsche Bank which according to the Danske Bank whistleblower, Howard Wilkinson, may have been responsible for facilitating an unprecedented $150 billion in money laundering involving shady clients, many of whom were Russians.
As we reported earlier, Deutsche continued to clear transactions for Danske's Estonia branch until 2015, two years after JPM had ended its correspondent banking relationship with Danske's Estonia branch over AML concerns. The suspicious funds flowed through Danske between 2007 and 2015 before Denmark's largest lender closed its non-resident portfolio over AML concerns.