SocGen to pay $1.34B to settle U.S. sanctions case

NEW YORK • Société Générale SA settled its longstanding sanctions violations case with U.S. authorities, entering a deferred prosecution agreement with federal prosecutors and paying US$1.34 billion to regulators in New York and Washington.

As part of the settlement announced on Monday, France’s third-largest bank acknowledged violations of U.S. sanctions laws against Cuba, Iran and Sudan starting as far back as 2003 and extending to 2013.

The bank agreed to pay US$1.34 billion in all to settle the matter, the U.S. Federal Reserve said in a statement. For the sanctions violations, it will pay US$717 million to the U.S. Justice Department, US$325 million to New York’s Department of Financial Services, US$163 million to the Manhattan District Attorney’s office, US$81 million to the U.S. Federal Reserve and US$54 million to the U.S. Treasury. It will pay an additional US$95 million to the DFS for weak antimoney-laundering controls.

“Société Générale has admitted its wilful violations of U.S. sanctions laws — and longtime concealment of those violations — which resulted in billions of dollars of illicit funds flowing through the U.S. financial system,” said U.S. Attorney Geoffrey S. Berman in Manhattan, which announced the settlement. “Other banks should take heed: Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this office and our partner agencies.”

SocGen shares rose 1.27 per cent to 33.03 euros in Paris. The cost of the penalties is covered entirely by legal provisions already booked in SocGen’s accounts, the bank said in a written statement on Monday. The French company sees no additional impact to its 2018 results from these agreements.

“We acknowledge and regret the shortcomings that were identified,” chief executive Frédéric Oudéa said. SocGen “has already taken a number of significant steps in recent years and dedicated substantial resources” to improve its compliance programs for stamping out sanctions evasion and money laundering.