THE JOURNAL OF EXPORT CONTROLS AND SANCTIONS

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Société Générale braced for home country bribery probe

November, 2017

Investigation to focus on bank's work with Libya’s sovereign wealth fund

Société Générale braced for home country bribery probe

French banking and financial services operator Société Généraleis is being investigated by the French regulatory authorities over alleged bribery in its work with the Libyan Investment Authority (‘LIA’), Libya’s sovereign wealth fund.

France’s Parquet National Financier opened preliminary enquiries in September, issuing requests for information in September and October. The precise nature of the requests are not clear at this stage, but were revealed in an update to the company’s 2016 annual report on 6 November.  Société Générale has already faced legal action in other jurisdictions over the alleged bribery. In May, the bank paid €963m to the LIA to settle a long-running civil lawsuit hours before the action was due to be heard in London’s High Court. The dispute centred on €2.1bn of trades that took place between 2007 and 2009, when Muammer Gaddafi was in power. The LIA claimed that the trades were secured by the payment of $58.5m to a Libyan businessman, Walid Giahmi.

In a joint statement with the LIA announcing the settlement, Société Générale said that it ‘wished to place on record its regret about the lack of caution of some of its employees’.

The US Justice Department is also investigating the alleged bribery claims as part of a broad investigation into possible violations of the US Foreign Corrupt Practices Act
(‘FCPA’) by a number of financial service institutions, hedge funds and private equity firms active in the Libyan market at that time.

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