British banking giant Barclays has paid out US$298 million to settle charges of hiding transactions with banks from US sanctions-listed countries, including Burma.
The payment was made to a US court after Barclays was charged with violating the International Emergency Economic Powers Act and the Trading with the Enemy Act, with transactions between 1995 and 2006 totalling some US$500 million.
“Barclays violated both US and New York state criminal laws by knowingly and wilfully moving or permitting to be moved hundreds of millions of dollars through the US financial system on behalf of banks from Cuba, Iran, Libya, Sudan and Myanmar [Burma],” according to court documents seen by Reuters.
The bank has, in effect, been laundering money for institutions whom are unable to function in the global financial system because of strict US sanctions. Despite the ruling yesterday, Barclays’ share price rose 1.1 percent.
Except for Cuba, all the countries listed in the ruling are major exporters of oil or gas, and therefore will have had large cash reserves to ‘dispose’ of. Details of the Burma-based companies named in the case are not available, but Burmese banks are believed to launder money from the country’s lucrative narcotics industry, as well as foreign companies operating in Burma, such as US oil giant, Chevron.
“Because this matter is pending before the court, at this time we will have no further comment,” Barclays’ spokesperson, Michael O’Looney, told Reuters.
He noted however that they would be seeking a “deferred prosecution”, which would mean the prosecution would not seek charges on the basis that Barclays fully cooperates with the court over the course of the next two years, and pays US$149 million to the US government and a further US$149 million in deferred charges to a New York court.
It was noted that the company had voluntarily handed over documents after an extensive internal investigation, which involved “reviewing” millions of records and interviewing some 175 current and former employees.
This case follows hot on the heels of Credit Suisse’s US$536 million court payout in December after similar allegations were levelled at the Swiss banking giant.