Big Companies, Big Compliance Violations, Big Fines
On the heels of Xe Services’ (formerly Blackwater) recent $42 million fine for export violations; Barclays has also been hit with a whopping $298 million fine.
Barclay’s violated international sanctions by permitting its employees to accept payments into the US from banks in blocked countries, including Iran, Myanmar, Cuba and Libya.
According the the Wall Street Journal article, “Barclays Settles U.S. Charges”
In a settlement with U.S. and New York prosecutors made public Monday, the London-based bank agreed to pay $298 million to settle criminal charges. And it acknowledged that its employees, between 1995 and 2006, helped banks in Iran, Cuba, Libya, Myanmar and Sudan evade U.S. regulations prohibiting payments into the U.S.
Between 1995 and 2006, prosecuters allege that Barclays accepted over $500 million in transactions, concertedly covering up the country names where the illegal payments originated from.
In other cases, Barclays returned payments out of fear they would be detected by U.S. officials, sending fax cover sheets that said: “Payments to U.S.A. must NOT contain the word listed below.” Prosecutors said payments often were re-sent after references to the sanctioned countries, which included Sudan and Myanmar, were omitted.
Other recent high-value fines have come through in recent months, including:
- ABN Amro settled for $500 million to end allegations that it helped Iran, Libya, Sudan and Cuba evade U.S. sanctions by “stripping” the identities of transactions to conceal the countries from which they originated.
- Credit Suisse Group paid $536 million to settle similar violations involving transactions with Iran.
- In 2009, a unit of London-based Lloyds Banking Group paid $350 million related to similar charges after being accused of masking the origin of payments from Iran and Sudan.
WSJ discusses the Barclay’s case in the first half of the video below:
Xe Services, formerly called “Blackwater,” was also fined this week for violating export regulations under ITAR, or the International Traffic in Arms Regulations. While acting as a contractor for the US government in Iraq, the company committed 288 violations of the International Traffic in Arms Regulations (ITAR), including the “unauthorized export of defense items and provision of defense services to foreign-end users in multiple countries from 2003 to 2009.” While no sensitive technologies were involved, the items do require a license before they can be exported.
The New York Times reported that Xe Services committed violations included illegally exporting weapons to Afghanistan, unauthorized proposals to train troops in Sudan, providing Taiwanese police officers with sniper training, and shipping military equipment to its personnel in Iraq and Afghanistan.
The company has settled the charges with the State Department to the tune of $42 million. Several outstanding allegations, investigations, and indictments remain in process, however, as these aren’t trade compliance related I’ll leave them for your own personal reading at NYT.
Just goes to show, an ounce of prevention, using trade compliance systems, is worth a pound of cure.
Special Thanks to Global Trade Content Blog and the Export Compliance Group on LinkedIn.
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