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French Bank to Pay Close to $1B in US Sanctions Investigation

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France’s Credit Agricole SA is coming close to reaching an agreement to pay close to $1 billion to resolve pending investigations.

France’s Credit Agricole SA is coming close to reaching an agreement to pay close to $1 billion to resolve pending investigations as to whether it had illegally engaged in transferring funds through the United States for blacklisted individuals and countries such as Sudan and Iran, according to published reports.

A Reuters report indicated that talks between the sides are ongoing and the total penalty which is currently being negotiated by multiple U.S. agencies, could fluctuate.  A second source described the current settlement as in the “high hundreds of millions”.

Two people close to the case told Reuters that the bank which is France’s third-largest listed lender, is expected to reach an accord at some time this month.  Credit Agricole had no immediate comment on press inquiries.

Credit Agricole said it was in “very advanced talks” with U.S. authorities, last month, over the sanctions probes and has set aside an additional 350 million euros ($392 million) for a settlement, according to the Reuters report.

In terms of allocating funds for litigation, Credit Agricole has earmarked $1.79 billion, but thus far it remains murky as to how much of that amount would be dedicated to a deal on sanctions.

A source who spoke on the condition of anonymity because of negotiations that are still ongoing did reveal that the resolution places a focus on misconduct that occurred between 2003 and 2008.

It appears that the resolution of settlements with US authorities over sanctions can be a protracted process because numerous agencies that linked to it, including the U.S. Department of Justice, Treasury Department, Federal Reserve, Manhattan District Attorney’s office and New York’s Department of Financial Services.  Reuters reported that they all declined to comment on the Credit Agricole negotiations.

Reports indicate that approximately a dozen European banks have been hit with tough US penalties for sanctions related matters and the fines have totaled nearly $14 billion in 2009.

Sources told Reuters that in March, Commerzbank AG (CBKG.DE), Germany’s No. 2 lender, agreed to pay $1.45 billion. Italy’s UniCredit SpA (CRDI.MI), France’s Societe Generale (SOGN.PA), and Germany’s Deutsche Bank AG (DBKGn.DE) are still under investigation.

France’s BNP Paribas which is the country’s largest bank made headlines last year when they were compelled to dish out a staggering $8.9 billion along with pleading guilty to criminal charges over its sanctions-busting.  In addition, a ban was placed on the mega-bank from conducting certain U.S. dollar transactions for a year, according to Reuters.

Standard Chartered Plc’s (STAN.L) 2012 deferred prosecution agreement was extended in December for another three years amid an ongoing probe of Iranian-controlled companies banking in Dubai, sources have told Reuters.

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