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article imageBank robbers go to jail if caught, bad banks just settle in court

By R. C. Camphausen     Aug 19, 2010 in Crime
British banking giant Barclays has paid $298 million to settle a case about dealing with US sanctions-listed countries such as Burma, Cuba, Iran, Libya and Sudan.
"Why isn't the government getting rough with these banks?" asked U.S. District Judge Emmet G. Sullivan from the lawyers who had arranged the deal, adding that unlike Barclays, an average American caught robbing a bank never gets deferred prosecution and the option of merely returning ill-gotten gains.
It is the third time in a year that a judge does not unquestioningly sign a deal arranged between prosecutors for the US government and lawyers representing a bank that has dealt with institutions in countries presently under sanctions. This time it was the case of UK-based Barclays Bank, earlier in August it concerned Citigroup Inc, with the Bank of America case in August 2009 having been the trend-setter. The latter case, wit an initial settlement proposal as $33 million, had to be renegotiated after criticism by U.S. District Judge Jed S. Rakoff in Manhattan. In the end, this led to a new deal that cost the bank $150 million instead. Even then, writes Bloomberg, Judge Rakoff signed the deal reluctantly, calling the accord “inadequate and misguided.”
Although Barclays is the U.K.’s second-biggest bank with 9 billion pounds (ca. $14 billion) in net income last year. its lawyers were successful to convince Judge Sullivan that the $298 million agreement was more than what the bank had earned by dealing with the sanctioned countries. This information comes from an article in the Wall Street Journal, where one can also read that the period of investigated deals ended in 2006.
The question arises, of course, whether or not we'll see similar cases come into court in the future, especially considering that sanctions on Iran have recently been tightened, and that the US seems to consider tougher sanctions on Burma in the near future.
While the above mentioned articles merely refer to banks having done business in countries that are off-limits, the website Democratic Voice of Burma is more forthcoming about what's really going on. Here's what the say: 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.
More about Sanctions, Money launderng, Barclays, Burma, Iran
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