Sanctions Update: BNP Paribas Pleads Guilty

BNP Paribas ("BNPP"), France's largest bank (and the world's fourth largest bank), pled guilty in New York State court to one count of Falsifying Business Records in the First Degree, in violation of New York Penal Law § 175.10, and Conspiracy in the Fifth Degree, in violation of New York Penal Law § 105.05(1), in connection with its role in concealing prohibited transactions involving entities in three sanctioned countries: Sudan, Iran and Cuba.

BNPP also agreed to plead guilty in federal court to one count of conspiring to violate the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., and the Trading with the Enemy Act, 50 U.S.C.A. § 1 et seq., in violation of 18 U.S.C. § 371, for the same conduct. The guilty pleas came during the conclusion of a joint investigation by the Manhattan District Attorney's Office, the Department of Justice and the U.S. Attorney's Office for the Southern District of New York. The bank was also the subject of investigations by, and reached settlements with, the Board of Governors of the Federal Reserve System ("FRB"), the Office of Foreign Assets Control ("OFAC") and the New York State Department of Financial Services ("DFS"). The press releases related to BNPP's settlements with the FRB, OFAC and DFS can be found here and here respectively. Subject to court approval, BNPP has agreed to pay a combined total of approximately $8.9 billion in penalties. A number of BNPP business lines on which the misconduct centered also will be required to suspend their U.S. dollar-clearing operations for one year.

Cadwalader continues to digest numerous documents associated with the pleas and settlements and will provide a more in-depth analysis shortly.

See: BNPP NYS Factual Statement; BNPP NYS Superior Court Information; BNPP OFAC Settlement; BNP Paribas SDNY Information; BNP Paribas SDNY Plea Agreement; BNP Paribas SDNY Statement of Facts; BNPP Board of Governors Cease and Desist Order - Joint Statement; BNPP Board of Governors Cease and Desist Order; BNPP DFS Order; BNPP NYS Allocution.See also: FRB Press Release; Treasury Press Release.See generally: Cabinet Sanctions Page (some materials are accessible to Cabinet subscribers only). For more information, please contact Dale Turza, James Treanor or Keith Gerver.