OFAC Enforcement Action against Credit Agricole

This was part of a much larger settlement (approximately $787 million) – OFAC's piece was about $329.5 million. There were a total of 4297 total violations – primarily of the Sudanese sanctions program, but also of the Cuban, Iranian and Burmese programs. The violations were not voluntarily self-reported and were considered egregious. That means that the base penalty was the statutory maximum of approximately $1.464 billion. That means the total fine (including the non-OFAC pieces) were over 50% of the maximum, and even OFAC's part was almost 25%.

Here's the nub of what was going on:

For a number of years, up to and including 2008, CA-CIB and certain of its predecessor banks,
and CA-CIB’s subsidiary located in Switzerland … and its predecessors … processed thousands of transactions to or through U.S. financial institutions that involved countries and/or persons (individuals and entities) subject to the
sanctions regulations administered by OFAC. Personnel (including managers) from various
business units within these CA-CIB entities were aware of U.S. economic sanctions programs
and understood that U.S. financial institutions were required to block or reject transactions
involving an OFAC-sanctioned country or person. Despite this knowledge, the above-referenced
banks used cover payments and/or implemented special payment practices in a manner that
omitted references to U.S.-sanctioned parties in U.S. Dollar (USD) Society for Worldwide
Interbank Financial Telecommunication (SWIFT) payment messages sent to the United States, thereby preventing U.S. financial institutions from appropriately reviewing and analyzing the
transactions for compliance with OFAC regulations.

and here's the OFAC math:

The following were found to be
aggravating factors:

CA-CIB — in particular through CLS and CAIS (which subsequently
merged to form CAS) — had indications that its conduct might constitute a violation of U.S. law
before the earliest date of the apparent violations;

several CA-CIB managers, in particular at the
Swiss locations and in some instances Paris Head Office, were aware of the conduct that led to
the apparent violations;

CA-CIB’s conduct resulted in significant harm to several of the
sanctions programs administered by OFAC and their associated policy objectives;

CA-CIB is a
large and sophisticated institution with a global presence; and

CA-CIB did not have appropriate
controls in place to prevent these apparent violations from occurring and otherwise had an
inadequate compliance program.

Mitigation was extended because

CA-CIB has not received a
penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of
the transaction giving rise to the apparent violations;

the bank took appropriate remedial action in
response to these apparent violations; and

CA-CIB provided substantial cooperation throughout
the course of OFAC’s investigation, including by producing detailed and well-organized
information, and by executing a statute of limitations agreement and multiple extensions to the
agreement.

OFAC also considered that the majority of the apparent violations occurred between
2003 and 2005 and prior to the publication of the ABN Amro settlement.