Banks try to disavow responsibility for the misconduct of their clients, but that position has suffered a serious setback in a court in New York. A federal jury has just returned what is being called a landmark verdict against French banking giant BNP Paribas for complicity in the genocide committed by the regime of Omar al-Bashir in the Darfur region of Sudan.
The jury awarded $20 million in damages to three individuals, but it opened the door to further and much more costly legal action against one of the largest banks in the world on behalf of the tens of thousands of Sudanese refugees living in the United States.
BNP Paribas has been embroiled in controversy over its dealings with Sudan for the past decade. In 2015, after facing criminal charges of violating federal government economic sanctions against Sudan (as well as Iran and Cuba), the bank was sentenced to a five-year term of probation and ordered to forfeit $8.8 billion to the United States and to pay a $140 million fine.
In the new civil litigation, BNP Paribas was accused of propping up the Sudanese regime by providing letters of credit that allowed it to circumvent U.S. sanctions. Despite the bank’s previous guilty plea, its lawyers argued that there was no connection between its services and the genocide. They had the difficult task of separating admitted sanctions violations from the atrocities the sanctions were designed to stop.
The jury did not buy it, and the follow-on class actions are expected to go the same way. Bloomberg is estimating that BNP Paribas may end up paying out up to $10 billion in settlements.
BNP Paribas is not the only multinational bank that may face such costs. Among the more than 600 economic sanctions cases documented in Violation Tracker are numerous cases brought by federal and state regulators in the U.S. against other foreign banks for their activity in Sudan.
For example, in 2015 Germany’s Commerzbank agreed to forfeit $563 million, pay a $79 million fine and enter into a deferred prosecution agreement with the Justice Department for sanctions violations in Sudan and other countries.
In 2018 France’s Societe Generale paid $420 million in a case brought by the New York State Department of Financial Services (DFS).
In 2014 Bank of Tokyo Mitsubishi UFJ paid $315 million to the DFS to resolve allegations of misleading regulators regarding its transactions with Sudan and other sanctioned entities.
In 2012 Britain’s Standard Chartered agreed to forfeit $227 million to the Justice Department for violations relating to Sudan and other sanctioned countries.
These banks and other financial institutions with similar penalties may not have had the same degree of involvement with Sudan as did BNP Paribas, but the fact that they were involved at all and faced criminal or civil charges would seem to make them possible targets for class action lawsuits.
The Sudan cases should serve as a reminder to major banks and other corporations that there will be a price to pay if they fail to comply with human rights norms in the pursuit of profit.