JPMorgan unwittingly aided BNP Paribas in hiding billions of dollars in transactions involving Sudan and Cuba, violating U.S sanctions, according to Bloomberg.
Court documents and people with knowledge of the matter said that BNP Paribas turned to JPMorgan on the legal advice from Cleary Gottlieb Steen & Hamilton, stating that using a U.S. bank may protect the Paris-based bank from sanction penalties. The law firm later said that such transactions may be illegal. Neither JPMorgan nor Cleary Gottlieb is mentioned by name in the court documents and neither is accused of wrongdoing.
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BNP Paribas, France’s largest bank, pleaded guilty to processing nearly $9 billion in banned transactions involving Sudan, Iran and Cuba from 2004 to 2012 earlier this week and were fined a record $8.97 billion in penalties. Moreover, it will also be temporarily banned from handling some U.S. dollar transactions.
At the time of the fine, Jean-Laurent Bonnafe, chief executive of BNP Paribas, said: "We deeply regret the past misconduct that led to this settlement. The failures that have come to light in the course of this investigation run contrary to the principles on which BNP Paribas has always sought to operate."
In regards to the link with JPMorgan, BNP Paribas declined to comment.
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