Federal prosecutors today charged Barclays Bank in a two-count information in Washington alleging the financial institution violated economic sanctions in dealings with countries that include Iran, Cuba and Libya, court records show.
Justice Department attorneys allege Barclays "knowingly and willfully" facilitated U.S. dollar transactions “for a number of parties and countries” that are sanctioned by the Office of Foreign Assets Control of the Treasury Department. The allegations span from March 1995 to September 2006, according to court records.
Charges were filed today in the U.S. District Court for the District of Columbia. Lawyers for Barclays are meeting with Justice Department prosecutors this afternoon in Washington federal district court. Click here for the criminal information and here for a copy of the deferred prosecution agreement.
Prosecutors allege Barclays hid payments from countries that face sanctions. Banks from Cuba, Iran, Libya, Sudan and Burma asked Barclays “not to mention their names in U.S. dollar payment messages sent to Barclays’ branch in New York,” according to court records. The payments, according to prosecutors, should have been held for investigation, rejected or blocked.
The bank’s attorneys at Sullivan & Cromwell negotiated a deferred prosecution agreement with the government in which the London-based bank will pay $298 million to settle the criminal charges. The federal government will receive $149 million, and the rest is designated for the District Attorney of the County of New York. Prosecution is deferred for two years.
Barclays in May 2006 voluntarily disclosed to the government four transactions that violated U.S. sanctions, according to court records. In November 2006, Barclays ended all U.S. dollar relationships with banks subject to U.S. economic sanctions. Federal and state prosecutors contacted the bank in 2007. Barclays agreed to cooperate, court records show.
A lawyer for Barclays, Sullivan & Cromwell associate Bruce Hickey in Washington, was not immediately reached for comment this afternoon. Senior trial attorney Frederick Reynolds of the Justice Department’s Asset Forfeiture and Money Laundering Section, which is part of the Criminal Division, is part of the team representing the government.
According to the agreement, Barclays’ head of compliance and regulatory affairs must certify by April 6, 2011, that the bank has completed comprehensive training on policy regarding United States, United Nations and European Union sanctions for all employees who are involved in the processing of U.S. dollar payments.