Barclays Bank PLC has reached a
$298 million agreement with U.S. and New York authorities to settle charges
that it facilitated financial payments for parties and countries facing U.S.
According to court documents filed
in a Washington, D.C., federal court, Barclays will forfeit $149 million
pursuant to an agreement with the U.S. Justice Department and another $149
million in a separate agreement with the New York County District Attorney’s
The U.K. bank said earlier this
month that it had set aside $303 million in the first half of the year to cover
a possible resolution to the case.
A Barclays spokesman declined to
comment on the settlement.
Barclays will also be subject to a
two-year deferred prosecution agreement, which will allow it to avoid
prosecution if it complies with a list of requirements.
According to court filings,
Barclays for a roughly nine-year period until September 2006 facilitated and
hid transactions for countries facing sanctions, including banks from Cuba,
Iran, Libya, Sudan and Burma.
Barclays didn’t mention the banks’
names in payment messages sent to its New York branch and other financial
institutions in the U.S. and instead routed payments through an internal
Barclays sundry account sometimes amending or reformatting payment messages.
Court papers also accuse Barclays of “deliberately using a less
transparent method of payment messages, known as cover payments.”
According to the deferred
prosecution agreement, after the passage of the Patriot Act in 2001, Barclays
reviewed its correspondent banking practices and identified some of those as
“problematic,” but “did not begin to take effective action until
Prior to mid-2006, Barclays also
did not train its non-U.S. employees regarding the investment bank’s
obligations “under U.S. sanctions law and did not formulate or circulate
any meaningful policy regarding the Office of Foreign Assets Control of the
U.S. Department of the Treasury regulations and their requirements,”
according to the agreement.
Court documents indicate Barclays
has accepted responsibility for its conduct.