Barclays Said to Settle U.S. Probe on Fund Transfers in Next Two Weeks
Barclays Plc, Britain’s third-largest bank, may settle with U.S. investigators within the next two weeks over how it handled money from countries subject to U.S. economic sanctions, according to a person close to the investigation.
Barclays has set aside 194 million pounds ($307 million) for the settlement, the bank said today in a statement. The British lender has been conducting an internal review and reporting the results to authorities including the U.S. Department of Justice, the Manhattan District Attorney’s Office and the U.S. Treasury Department’s Office of Foreign Assets Control “in relation to the possible resolution of this matter,” the bank said.
The bank is “in advanced discussions with these and other authorities” to end the probes, it said. Alistair Smith, a spokesman for the London-based bank, declined to comment.
Barclays said in February it is also being investigated by the U.K. Financial Services Authority over payments involving people or countries under U.K. Treasury sanctions. The bank disclosed the Department of Justice probe in 2007.
Credit Suisse AG, Lloyds Banking Group Plc and eight other banks came under investigation in the U.S. for processing payments which allowed Iran and other sanctioned nations to gain access to U.S. markets. Credit Suisse and Lloyds settled with state and federal authorities in the U.S. last year.
Wire Transfers
Lloyds paid over $350 million in January 2009 to settle the U.S. investigation. The bank, also London-based, admitted to altering wire transfer information to hide the identity of its clients and allowing billion of dollars to pass through U.S. banks in violation of the sanctions, according to the settlement with the Manhattan District Attorney and the Justice Department.
Erin Duggan, a spokeswoman for Manhattan District Attorney Cyrus Vance Jr., and Justice Department spokeswoman Alisa Finelli declined to comment on any possible Barclays settlement. Marti Adams, a spokeswoman for the Treasury Department, also declined to comment.
Robert Morgenthau, the district attorney in Manhattan at the time of the Lloyds settlement, said when the deal was announced that nine other major foreign banks had used the same technique to disguise illegal transfers.
Credit Suisse, based in Zurich, agreed in December to pay $536 million to U.S. authorities for making more than $1.6 billion in illegal transactions involving Iran, Sudan, Burma, Cuba and Libya from the mid-1990s through 2006, according to court documents.
FSA Fine
Earlier this week, Royal Bank of Scotland Group Plc was fined 5.6 million pounds by the FSA for failing to check over a year period whether its clients appeared on a U.K. Treasury sanctions list.
The FSA has said finance firms need to make sure they have systems and controls in place to prevent breaching sanctions and to comply with money-laundering regulations. The U.K. treasury created an asset-freezing unit in 2007 that maintains the list of firms under financial sanctions. The FSA is responsible for enforcing it in the U.K.
To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net; Karen Freifeld in New York at kfreifeld@bloomberg.net.
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