On November 19, 2018, the Department of Justice announced that Société Générale S.A. (SocGen), a French bank headquartered in Paris, was to pay fines in excess of US$1.34B for violations of the Trading With the Enemy Act.
These fines represent the second largest penalty ever levied against a financial institution for violating U.S. sanctions, following only the US$8.9B fine levied against BNP Paribas in 2014.
“Today, Société Générale has admitted its willful violations of US sanctions laws—and longtime concealment of those violations—which resulted in billions of dollars of illicit funds flowing through the US financial system,” said Geoffrey Berman, U.S. Attorney for the Southern District of New York.
Under a settlement agreement with U.S. authorities, SocGen will pay $717M to the U.S. Department of Justice, $325M to the NY Department of Financial Services, $163M to the Manhattan District Attorney’s office, $81M to the U.S. Federal Reserve, and $54M to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
From 2003 through 2013, SocGen operated several financial institutions that facilitated money flowing to a number of sanctioned entities—engaging in more than 2,500 transactions with parties in Iran, Sudan, Cuba and Libya that involved nearly US$13B.
“We acknowledge and regret the shortcomings that were identified in these settlements and have cooperated with the US authorities to resolve these matters,” said Société Générale Chief Executive Frederic Oudea.
“We aim to meet the highest standards of compliance and ethics, in the best interest of our clients and of all of our stakeholders.”
In addition to the fines, under the terms of the settlement agreement, SocGen has agreed to refrain from all future criminal conduct, and implement remedial measures as required by its regulators, including enhancements of its compliance program and sanctions-related internal controls. The U.S. Government has agreed to defer prosecution of criminal charges for a period of three years, and if SocGen has continued to comply with the terms of the agreement, the Government will then seek to dismiss the charges.