Recent OFAC and DOJ actions have focused on certain entities – overseas financial institutions – and particular conduct – US dollar clearing and associated “stripping.” The DOJ’s recent $232 million settlement and negotiated criminal plea with Schlumberger Oilfield Holdings Ltd., however, reflects a break from this trend. Relying on a theory of “facilitation” and wielding aggressive criminal charges, the DOJ dramatically expanded the scope of prior criminal enforcement actions in the OFAC arena. The DOJ’s latest stance also signaled to US manufacturing companies: there is more to come.
Change In Enforcement Trends -
Over the past few years, foreign financial institutions with US-operations have paid billions of dollars to resolve US criminal and regulatory inquiries into Sanctions-related activities. Over the past year alone, financial giants BNP Paribas and Commerzbank AG paid $8.83 billion and $258 million to resolve criminal/regulatory investigations regarding their alleged “stripping,” i.e. concealing/falsifying documentation regarding transactions involving sanctioned entities/countries. The BNP resolution in particular caused shock waves among white collar and sanctions practitioners, as the company pled guilty in federal and state court to charges including conspiracy and falsifying business records.
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