Frustrations of a former sanctions enforcer: Jimmy Gurulé

From 1990 to 1992 while on leave from Notre Dame, Law Professor Jimmy Gurulé served as Assistant U.S. Attorney General, and from 2001 to 2003 during another leave, Gurulé was Undersecretary for Enforcement for the U.S. Treasury Department, with oversight of the Office of Foreign Assets Control, which is responsible for enforcing U.S. economic sanctions programs.

Specializing in terrorist financing, money laundering and economic sanctions, Gurulé is currently paying close attention to the trials and tribulations of Standard Chartered Bank in New York, which will find out in a hearing next week if it will lose its license for questionable dealings with the government of Iran.

New York’s financial regulator filed a report accusing Standard Chartered PLC of scheming with Iran to hide more than $250 billion in illegal transactions, allowing the bank to reap hundreds of millions of dollars in fees. The New York State Department of Financial Services has threatened to revoke the license of Standard Chartered Bank, a U.S. unit of the London-based bank, to operate in the state, and the bank will have to justify why it should be allowed to keep its New York banking license.

Like any good economic sanctions enforcer, Gurulé is a big fan of holding bank officials accountable for serious financial crimes. In the case of Standard Chartered, the order cites tens of thousands of pages of internal memos, emails and other records, which don’t bode well for the bank.

Gurulé says, “Standard Chartered maintains that the Iranian financial transactions were lawful. However, in the documents cited in the complaint, senior bank officials expressed concern that engaging in such transactions could subject management in the U.S. and London ‘to personal reputational damages and/or serious criminal liability.’ At the upcoming hearing, hopefully Standard Chartered Bank officials will explain why they were concerned that these ‘lawful’ transactions could subject them to ‘serious criminal liability.’”

Gurulé says Standard Chartered is simply the latest in a string of cases involving corrupt bank officials purposely violating U.S. economic and trade sanctions in order to reap a profit from rogue regimes such as Iran. He points to Lloyds Bank, Barclays, Credit Suisse, ABN Amro and ING Bank, and says it’s up to the U.S. Department of Justice to hold bank officials accountable for serious financial crimes.

“The failure of the DOJ to hold corrupt bank officials criminally responsible for serious violations of anti-money laundering laws and regulations has contributed to an environment of impunity,” says Gurulé.  Bank officials who knowingly and purposely violate U.S. anti-money laundering laws and economic sanctions prohibiting U.S. and foreign banks operating in the U.S. from providing financial services to sanctioned countries such as Iran, Sudan and Syria, know that there is little chance that they will be held criminally liable for their crimes. Lax oversight by the U.S. federal regulators has also contributed to this crisis.”

He must be missing his role as a crime fighter right about now, but Gurulé (also a former federal prosecutor in Los Angeles) is instead voicing his frustrations through the media.  NPR (Morning Edition), New York Times, Washington Post, Reuters, Bloomberg/Businessweek, Huffington Post.


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