Legal Briefing: Barclays, Another Bank That Violated Economic Sanctions

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legal briefing

A daily look at legal news and the business of law:

Barclays Pays $298 Million for Violating International Economic Sanctions

As a foreign policy tool, economic sanctions have a chance of being effective only if they're followed. Current U.S. policies regarding Cuba, Iran, Libya, Burma, and Sudan (among other countries) require banks not to transact with them. Barclays (BCS) has just agreed to pay $298 million to settle criminal charges that it nonetheless did business with all of these countries, altering documents to hide the nations involved.

The New York branch of Barclays detected a prohibited transaction with Sudan in 2001 and reported it to headquarters, but the transactions continued, reports The Wall Street Journal. Ultimately, in 2006 senior management learned of four prohibited payments and reported them to prosecutors, leading to the investigation and charges that were settled.

Other banks have settled similar charges in recent years. ABN Ambro (now Royal Bank of Scotland) paid $500 million last May, Credit Suisse shelled out $536 million last December, and Lloyds TSB forked over $350 million in January, 2009.

The long list of banks enabling countries to evade the sanctions our government has imposed is really depressing. The profit motive, left unpoliced, once again undermines our country. Perhaps this string of settlements signals a new era of law enforcement, a new commitment to making sanctions work? We'll see.

California Gay Marriages Blocked Indefinitely

Gay couples hoping to wed in California will have to wait until past Halloween to get married -- and probably until 2011. The Ninth Circuit Court of Appeals has issued its own stay blocking same-sex marriages until it can decide whether the gay-marriage ban is unconstitutional.

The court is in a hurry to decide, setting an accelerated schedule without having been asked to do so. Gay-marriage opponents have to file their brief by Sept. 17; gay-marriage supporters must respond by Oct. 18; and the final brief, gay-marriage opponents' reply, is due Nov. 1. The court is taking the issue of whether gay-marriage opponents have the standing to appeal very seriously, asking them to address the issue in the Sept. 17 brief.

With this briefing schedule, a decision isn't expected until next year, and whatever that decision is will surely be appealed again. So California gay couples would be wise not to make wedding plans for the time being.

Monks Take on "Casket Cartel"

Benedictine monks want the right to sell pine-box caskets in Louisiana, something they're not allowed to do because state law only allows licensed funeral homes to sell caskets. Suing to overturn that law, the monks point out that a person can be buried legally without a coffin and claim the purpose of the casket law is just to keep the product's prices inflated. The monks argue that protecting a private group's profits is not a purpose rationally related to a legitimate state interest and thus violates their claimed constitutional right to make caskets, reports the ABA Journal.

While a constitutional right to casket making sounds odd, death and funerals are such intimate acts that individuals should have control over such core elements as choosing a coffin and not have their options artificially limited by an industry seeking to protect its profit margins. I hope the monks win this one.