BNP Paribas Revamps Compliance After Sanctions Violations Settlement
20 Nov 2019

Five years after agreeing to pay a record fine for sanctions violations, BNP Paribas S.A. has made structural changes to its compliance division—an effort to strengthen the independence of the bank’s compliance function and improve ethical culture.

The efforts have included setting compliance as an independent function that reports directly to the chief executive, as well as moving part of the bank’s head office for sanctions compliance—the unit that sets the global sanctions compliance standards for the bank—to New York from Paris in 2014, according to Eric Young, chief compliance officer for BNP Paribas Americas, who spoke Tuesday at a panel hosted by The Wall Street Journal and Dow Jones Risk & Compliance.

“Other banks are looking at our model because they see benefits,” Mr. Young said on the sidelines of the event, referring to the move of the head office for sanctions compliance.

The French bank in 2014 agreed to enter a guilty plea and pay nearly $9 billion to U.S. federal and state authorities for violating the International Emergency Economic Powers Act and the Trading with the Enemy Act. It was the first time a global bank had agreed to plead guilty to violating U.S. economic sanctions.

The penalties included the largest-ever settlement—more than $963 million—with U.S. Treasury Department’s Office of Foreign Assets Control, which enforces U.S. economic sanctions.

OFAC said that BNP Paribas allegedly processed thousands of transactions to or through U.S. financial institutions that involved countries, entities or individuals that are blacklisted by the U.S. up to 2012. The sanctions programs involved Sudan, Iran and Cuba, according to the settlement agreement published by OFAC in 2014.

When Mr. Young joined BNP Paribas Americas in January 2015, about six months after the agreement, the bank’s compliance function was decentralized and the company had begun remediation.

By Mengqi Sun, The Wall Street Journal, 19 November 2019

Read more at The Wall Street Journal

Photo (cropped and edited): Sergey Galyonkin [CC BY-SA 2.0], via Wikimedia Commons

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