home Economic Sanctions European Banks Remain Under US Scrutiny for Sanctions Violations

European Banks Remain Under US Scrutiny for Sanctions Violations

According to various reliable news sources, Crédit Agricole – also known as France’s “Green Bank” because of its strong business links to agriculture – may be paying as much as $800 million for alleged violations of U.S. economic sanctions on Iran and Sudan.

That other news embedded in the story, however, serves as a reminder that despite the public relations push to ease sanctions against Iran and other countries, there are other investigations underway:

” … More sanctions-related bank settlements are pending. European lenders Deutsche Bank AG, Societe Generale SA and UniCredit AG have all disclosed they are cooperating with U.S. authorities on investigations into sanctions violations. Those matters are expected to be settled in 2016 at the latest, according to people briefed on the probes …, (Bloomberg).

All in all, not surprising except maybe the amount of the proposed fine. I thought the fine would be much higher. Keep in mind that another French bank – BNP Paribas – agreed to pay in 2014 close to $9 billion for Iran, Cuba and Sudan sanctions violations.

While these fines may seem astronomical, in the overall scheme of things, it is a small drop in the money bucket. For example, according to Crédit Agricole’s 2014 annual report, the bank had total assets adding up to close to $2 trillion. While not chump change, an $800 million fine is a paltry .04% of Crédit Agricole’s total net assets for 2014. So for those that complain about the fines, be judicious with the perfunctory expressions of righteous indignation.

While the large fines and negative public relations can and do have an impact, mandatory prison time for egregious criminal conduct for economic sanctions violations are still needed. Senate Judiciary Committee Chairman introduced a bill last week that would do just that (S. 2123):

“(d) Minimum Term Of Imprisonment For Certain Acts Relating To The Provision Of Controlled Goods Or Services To Terrorists Or Proliferators Of Weapons Of Mass Destruction.— 

“(1) IN GENERAL.—A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, solicits the commission of, or aids or abets in the commission of, an unlawful act described in paragraph (2) shall, upon conviction, be imprisoned for a term of not less than 5 years. Notwithstanding any other provision of law, a court shall not place on probation any person sentenced under this subsection.

By the way, if you think that the use of economic sanctions are waning as a foreign policy tool for the United States, don’t. They are not going away and, as frequent readers of this site know, we’ve said for some time now that they will increase in use the years ahead.

More to come …

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