JPMorgan unwittingly helped BNP Paribas violate U.S. sanctions as the bank hid billions of dollars in transactions involving Sudan and Cuba, according to court documents and people with knowledge of the matter.
Bloomberg News reports that BNP Paribas turned to JPMorgan on the basis of legal advice from Cleary Gottlieb Steen & Hamilton LLP, said two people who asked not be named because the identities of the bank and the law firm haven’t been disclosed. The bank relied on a legal memo that suggested using a U.S. bank might protect it from sanctions penalties, according to the statement of facts filed by prosecutors in New York.
JPMorgan is referred to as 'U.S. Bank 1' while Cleary Gottlieb is identified as 'U.S. Law Firm 1' in the court filings, the people said. Cleary Gottlieb later said such transactions may be illegal. Neither JPMorgan nor Cleary Gottlieb are accused of wrongdoing.
BNP Paribas agreed June 30 to plead guilty to processing almost $9bn in banned transactions involving Sudan, Iran and Cuba from 2004 to 2012. The company, which will pay a record $8.97bn in penalties, will also be temporarily barred from handling some U.S. dollar transactions.
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