On 20 October 2015, Crédit Agricole Corporate and Investment Bank ("CA-CIB"), a subsidiary of the French bank Crédit Agricole S.A., reached settlements with several US federal and state regulators in which the company agreed to pay a total of $787,300,000, entered into deferred prosecution agreements with certain regulators, and agreed to certain other compliance conditions in order to resolve its potential liability for violations of US sanctions regulations and other federal and state laws prohibiting financial transactions with improper parties and the falsification of financial records. The conduct at issue related to thousands of transactions that CA-CIB processed using several methods designed to avoid detection by US financial institutions.
From 2003 to 2008, CA-CIB, through subsidiaries and predecessor entities primarily located in Switzerland, processed thousands of transactions, totaling at least hundreds of millions of dollars, that traveled through the US on behalf of parties subject to US sanctions mainly against parties located in Sudan, but also in Burma, Iran and Cuba. CA-CIB employees used several techniques that were approved by high-level officers to remove the names and locations of the sanctioned parties from transactions traveling through the US, including transactions sent to CA-CIB's New York branch. Communications uncovered during the investigations showed CA-CIB employees, including compliance personnel, taking positions that were clearly inconsistent with US law (such as the position that US regulations did not apply to activities conducted in Switzerland even if they involved transactions traveling through the US). This evidence also showed written policies directing employees to omit information from transactions that would identify parties as being from certain sanctioned countries in order to avoid detection by US financial institutions.
CA-CIB's activities were investigated by the US Attorney's Office for the District of Columbia (which is part of the DOJ), the Treasury Department's Office of Foreign Assets Control ("OFAC") and the Board of Governors of the Federal Reserve System at the federal level and by the New York County District Attorney's Office and the New York State Department of Financial Services at the state level. The approximately $787 million that CA-CIB agreed to pay was divided among these different regulators. In addition, CA-CIB entered into deferred prosecution agreements and agreed to compliance and remedial steps. While CA-CIB received some credit for, among other things, its cooperation with the investigation, its remedial actions, and the fact that the conduct at issue subsided recently, other factors, such as the egregiousness of the conduct, CA-CIB's status as a global financial institution and CA-CIB's lack of proper controls were deemed to aggravate the nature of its conduct. This matter serves as a reminder that foreign companies doing business in the US are not shielded from the laws and regulations of the United States just because the companies are located outside the US. Such companies should assess what US rules apply to their business and take the steps necessary to ensure compliance with those rules.
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