NGO Coalition Files a Complaint Against French Banks for Money Laundering Linked to Amazon Deforestation

The Non-Governmental Organisations (NGOs) have filed complaints against French banks BNP Paribas, Crédit Agricole, BPCE, and AXA with the French National Financial Prosecutor’s Office (PNF) asking for criminal investigations into money laundering, cash concealment, and illegal cash exchange following the banks’ financing of Brazilian meat companies JBS and Marfrig on Nov 8th.

The NGO coalition filed a complaint against the French banks BNP Paribas, Crédit Agricole, BPCE, and AXA for funding meat firms, JBS and Marfrig, which in turn drove deforestation in Brazil, of money laundering, concealing funds, and engaging in illicit financial flow that was directly linked to Amazon deforestation. Brazil and France have recently passed a money laundering directive that states that any advantage received from an environmental crime, including cash or goods, will be considered the proceeds of crime and a predicate offense. Deforestation is also banned in both countries. With assistance from the French National Financial Prosecutor’s Office (PNF), the complaint is prosecuted.

The coalition claimed that the meat corporations had not done enough to stop livestock from entering their supply chains from unlawfully cleared regions because clearing forests for cattle ranching is the leading cause of deforestation in Brazil and South America. The banks might potentially face criminal liability for their provision of financing and subsequent profit-making. The four French banks involved made almost $11.7 million in profits between 2013 and 2021 from their combined investments of approximately $70 million in bonds issued by top Brazilian meat firms.

Anahita Yousefi, founder and executive director of the NGO Harvest, stated, “You have an obligation to make sure that you are not enabling money laundering, and you need to put in really strong mechanisms to make sure that you’re excluding actors that are profiting from illegal deforestation. But, clearly, what we’re seeing is that the banks are not taking those obligations seriously.”

Yousefi stated that a significant change in combating the issue has been addressing the economic factors contributing to deforestation. Earlier in June, the EU Parliament approved historic restrictions banning agricultural products connected to deforestation. She further stated, “Yet they’ve so far really failed to address the role of the European financial sector in facilitating and financing these activities.”

To address non-compliance with its sustainability obligations, the financial sector has nevertheless taken some action. The biggest bank in Northern Europe, Nordea, withdrew $48 million from its investment in JBS in 2020 due to the company’s non-compliance with mandatory ESG criteria. However, global banks invested $43.5 billion in Brazilian meatpacking industries associated with deforestation between 2015 and 2020. Furthermore, the group claims that the four French banks involved in the complaint invested nearly $70 million worth of bonds issued by JBS and Marfrig between 2013 and 2021, making approximately $11.7 million in profits.

With the enactment of the 2017 Duty of Vigilance Law, France became the first nation in the EU to impose required due diligence on fundamental rights. The law, which is recognised as one of the most sophisticated in the world, holds big businesses legally responsible for abuses of human rights and environmental harm that has happened in their supply chains.

Sherpa may pursue the matter as a civil party complaint if the PNF fails to reply to the coalition’s complaint within three months. In any case, Jean-Philippe Foegle, Sherpa’s advocacy and litigation officer, stated that they anticipated the case would take at least two to three years to resolve due to its intricacy. If found guilty, the directors of the banks would face personal liability, sanctions, and penalties, and their companies might be prohibited from doing business with the French government.

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