It is the most severe sanction ever imposed on a bank by the French Prudential Supervision and Resolution Authority (ACPR), which regulates the banking and insurance sectors.
“These measures sanction a serious deficiency in the detection device” of operations made by and for people or entities whose assets have been frozen following their participation in terrorist activities or violations of international law,” explained the ACPR in a press release.
The ACPR said the Banque Postale system was “not in conformity with the applicable obligations in this field and (…) not in line with what is expected from a large size organization, furthermore one belonging to the public sector”.
Furthermore, even though the French Bank has identified weaknesses in its cash transfer operations, “no corrective measures had yet been put in place at the time when APCR checked, from March to July 2017, the statement adds.
The ACPR said it had discovered 75 transfers carried out by the Banque Postale from 2009 to 2017 involving 10 people whose assets had been frozen, nine of them in the wake of anti-terror investigations.
This national cash transfer service, which was accessible to anyone, even if they didn’t have an account at the bank, was cancelled by the Banque Postale in January 2018.
The Banque Postale said it would appeal the ruling, adding that subsequent verifications had determined that "none of the operations themselves constituted money laundering or terrorism financing".