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Global Banks on TrialU.S. Prosecutions and the Remaking of International Finance$
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Pierre-Hugues Verdier

Print publication date: 2020

Print ISBN-13: 9780190675776

Published to Oxford Scholarship Online: April 2020

DOI: 10.1093/oso/9780190675776.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 24 September 2021

“A Hidden War”

“A Hidden War”

Sanctions Evasion

Chapter:
(p.109) 4 “A Hidden War”
Source:
Global Banks on Trial
Author(s):

Pierre-Hugues Verdier

Publisher:
Oxford University Press
DOI:10.1093/oso/9780190675776.003.0004

This chapter examines the rise of financial sanctions as a tool of U.S. foreign policy and the role of U.S. prosecutors in enforcing sanctions against global banks. It describes how the United States developed its financial sanctions capabilities against terrorist groups, then turned them against state actors such as North Korea, culminating with elaborate sanctions programs against Iran and Russia. It shows how U.S. federal and state prosecutors uncovered large-scale sanctions evasion efforts at numerous global banks that processed U.S. dollar payments. This enforcement campaign led to some of the largest criminal fines ever levied, and global banks such as HSBC and BNP Paribas agreed to implement U.S. sanctions and anti-money laundering controls in their worldwide operations, thus broadening the reach of U.S. policy. Although U.S. enforcement actions faced strong criticism by U.S. allies, banks facing large fines, negative publicity, and potential loss of access to essential U.S. dollar payment infrastructure complied with U.S. demands. Unlike other cases, U.S. sanctions did not lead to multilateral reforms, instead triggering efforts by sanctioned states and bystanders to reduce their dependence on the U.S. dollar and U.S. payment systems.

Keywords:   economic sanctions, financial sanctions, Iran, Russia, HSBC, BNP Paribas, Office of Foreign Assets Control, OFAC

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