Credit Agricole 'to pay $1.09b to settle US sanctions probe'

France's Credit Agricole has agreed to pay the US authorities US$787 million (S$1.09 billion)
France's Credit Agricole has agreed to pay the US authorities US$787 million (S$1.09 billion)PHOTO: REUTERS

NEW YORK (Reuters) - France's Credit Agricole has agreed to pay the US authorities US$787 million (S$1.09 billion) to settle allegations that it illegally moved money through the US financial system in violation of sanctions against Iran, Sudan, and other countries, according to a person familiar with the matter.

Credit Agricole has already made provisions totalling 1.6 billion euros against litigation costs after taking a further 350 million euro charge related to the US investigation in its second-quarter results.

The deal is likely to be announced today, the person said.

The payment is to be made under a so-called deferred prosecution agreement with the bank, another source said.

Under such agreements the accused party is subjected to closer supervision for a certain period of time, typically three years, and if they do not abide by the terms of the deal, criminal charges could be filed.

Credit Agricole declined to comment.

Representatives of the US Department of Justice, US Treasury Department, Manhattan District Attorney's office and New York Department of Financial Services declined to comment.

Credit Agricole is the latest foreign bank to settle charges of violating US sanctions, with altogether about a dozen international banks, mostly European, having been hit by US penalties totalling US$14 billion since 2009.

BNP Paribas, France's largest bank, last year paid a record-breaking US$8.9 billion in penalties and pleaded guilty to criminal charges over sanctions-busting.

It was also banned from conducting certain US dollar transactions for a year.

"They (Credit Agricole) have learnt from experience," said a person familiar with how the BNP Paribas case evolved.

Banks typically have been accused of stripping information on wire transfers to the United States so payments connected to Iran or other sanctioned entities would not be detected.

Specifically Credit Agricole was accused of violating US sanctions against Iran, Sudan, Myanmar and Cuba between 2003 and 2008, the first source said.

Meawnhile Italy's UniCredit, France's Societe Generale and Germany's Deutsche Bank remain under investigation by the US authorities, sources told Reuters.