FX news: Compliance violations cost Barclays dear
One might have felt that some of the fines recently dished out by the UK’s FSA (FSA slaps JP Morgan with biggest fine ever, UBS fined for dodgy dealing) were on the harsh side but they were nothing more than a clips round the ear compared with this week’s judgement meted out to Barclays by US authorities (Federal Reserve Board press release, Department of Justice press release). Barclays has to stump up a total of $298 million, split 50/50 between “the United States and to the New York County District Attorney’s Office”
The fine (or “forfeiture” in the parlance of the US Department of Justice) is “in connection with violations of the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA)...The violations relate to transactions Barclays illegally conducted on behalf of customers from Cuba, Iran, Sudan and other countries sanctioned in programs administered by the Office of Foreign Assets Control (OFAC).” The violations took place between 1995 and 2006.
“According to court documents, Barclays followed instructions, principally from banks in Cuba, Iran, Libya, Sudan and Burma, not to mention their names in U.S. dollar payment messages sent to Barclays’ branch in New York and to other financial institutions located in the United States.