MANHATTAN (CN) – Barclays Bank will pay $298 million to settle criminal charges that it violated U.S. sanctions and New York laws by processing hundreds of millions of dollars in transactions from Cuba, Iran, Sudan and Myanmar. Barclays transferred $500 million in illegal payments through the U.S. financial system from the mid-1990s through 2006, state and federal prosecutors said.
The London-based bank will forfeit $149 million to New York State and as much to the United States.
Manhattan District Attorney Cyrus Vance said there were “important mitigating factors” that led to the agreement to defer prosecution, most notably, Barclay’s cooperation and acknowledgment that it performed criminal acts.
Barclays admitted it dodged the Office of Foreign Assets Control (OFAC) by altering and routing payment messages so that money from sanctioned clients cleared through its New York branch and other U.S. institutions.
Following instructions from bankers in Cuba, Iran, Libya, Sudan and Myanmar, Barclays withheld the countries’ names when conducting transactions, and moved money through an internal account to hide the payments’ origin.
“Banks in Manhattan that process most of the world’s U.S. dollar payments use sophisticated computer systems, commonly known as ‘OFAC filters,’ to prevent sanctioned entities, as well as terrorists, money launderers, and other criminals, from gaining access to the U.S. banking system,” Vance said in a statement.
“These OFAC filters act as the first line of defense to protect the integrity of the U.S. financial system. Barclays helped its sanctioned clients, predominantly from Cuba and Sudan, evade the U.S. banks’ OFAC filters and gain access to the U.S. financial system.”
Barclays, one of the largest banks in the world, reported a net income of more than $14 billion in 2009.