Barclays – which is settling criminal charges of breaking US sanctions by effecting wire transfers with Cuba, Iran, Libya, Sudan and Burma – was accused of stripping out identifying data in the transfers, it has emerged. The bank is awaiting court approval for the $298 million (£190 million) settlement.
Prosecutors claim the bank deliberately hid half a billion dollars’ worth of transactions with the countries during times of US sanctions, between 1995 and 2006. They reportedly allege it stripped out the key data, such as people’s names, as well as reformatted payment messages into a less transparent layout for the bank’s New York office and other financial institutions.
Under the terms of the settlement, Barclays will be forced to create and maintain a database of payments it made and received on the Swift financial messaging network from 2000 to 2007, the New York Times reported.
The bank will pay half of the settlement to the US Department of Justice and half to the office of the Manhattan district attorney. It declined to comment.
Barclays, which voluntarily disclosed some of the transactions four years ago and had cooperated with the state prosecutors’ review, is today awaiting federal judge Emmet Sullivan’s approval of the settlement.
But Sullivan yesterday expressed strong disappointment at the agreement, naming it a “sweetheart deal” and questioning why individuals were not being charged. In a heated court hearing, he asked: “Why isn’t the government getting tough with the banks?”
The settlement deal, if it goes ahead, will be the latest in a string of settlements over money transfers with sanctioned countries. In January 2009, Lloyds settled accusations that it had removed identifying information from transactions from Sudan, Iran and Libya, paying $350 million. In December of that year, Credit Suisse paid $536 million for a similar matter concerning transactions with Iran.
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