Societe Generale fined $1.3 billion for sanctions, anti-money laundering violations
20 Nov 2018

French lender Societe Generale has been hit with a number of fines and actions by various US departments over allegations it breached financial crime rules.

The US Treasury’s Office of Foreign Assets Control, Fed Reserve, the New York County District Attorney’s Office and the New York Department of Financial Services (DFS) were among the agencies that issued statements outlining allegations against the bank and settlements reached, which totalled around $1.3 billion.

SocGen processed billions of dollars for parties in countries sanctioned by the United States, including Iran, Sudan, Cuba and Libya, the DFS said, adding that its New York branch violated New York AML and recordkeeping laws.

DFS Financial Services Superintendent Maria T. Vullo said: “The absence of an effective, global sanctions-compliance infrastructure and lack of management oversight allowed Société Générale employees to ignore the scope and applicability of laws governing economic sanctions, as well as New York anti-money laundering and recordkeeping laws.”

In addition, DFS examiners discovered deficiencies in the branch’s policies regarding suspicious activity reporting and flaws in the branch’s customer due diligence protocols.

The bank’s misconduct was also noted by the Manhattan District Attorney’s Office which found that the bank was involved “in a broader ‘concealment practice’ of processing U.S. transfers on behalf of sanctioned entities while omitting information about the sanctioned entities from the accompanying payment messages to U.S. financial institutions located in Manhattan, in order to circumvent U.S. sanctions,” the MDA Office stated.

“In total, Soc Gen engaged in more than 2,500 sanctions-violating transactions through Manhattan financial institutions, valued at nearly $13 billion.”

SocGen also admitted that it falsified the records of New York financial institutions.

In a statement, the bank said it is “committed” to continue to enhance its compliance program.

“The Bank has also agreed with the Federal Reserve to retain an independent consultant that will evaluate the Bank’s progress on the implementation of enhancements to its sanctions compliance program,” it added.

– Irene Madongo

Read more:

Money laundering: ING bank fined €775m over due diligence, client on-boarding

HSBC fined over poor money laundering controls in South Africa

UK football clubs in live money laundering investigations

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