Reported by Dimitri Selibas

On Nov. 8, an NGO coalition filed a complaint with the French National Financial Prosecutor’s Office (PNF) against French banks BNP Paribas, Crédit Agricole, BPCE and AXA, calling for a criminal investigation for money laundering and concealment, based on the banks’ financing of leading Brazilian meat companies JBS and Marfrig.

Deforestation is illegal in Brazil and France, and according to a recent European Union directiverelating to money laundering, any benefit obtained from an environmental crime, such as money or commodities, may represent the proceeds of crime.

Clearing forests for cattle ranching is the leading driver of deforestation in Brazil and South America, and the coalition argued that the meat companies had not taken sufficient steps to prevent cattle from illegally deforested areas coming into their supply chains. By providing financing and making a profit from it, the banks also potentially would be criminally liable.

“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,” said Anahita Yousefi, founder and executive director of the NGO Harvest. “But clearly what we’re seeing is that the banks are not taking those obligations seriously.”

Harvest coordinates the NGO coalition, which includes Transparency International, Sherpa from France, the Center for Climate Crime Analysis (CCCA) in the Netherlands and Repórter Brasil.

The French connection

In the EU, France was the first country to adopt mandatory human rights due diligence through its 2017 Duty of Vigilance Law. The law holds large companies legally accountable for human rights violations and environmental damages that have occurred in their supply chains and is regarded as one of the most advanced in the world.

The first lawsuit relating to duty of vigilance was heard in February this year, filed by Oxfam, Friends of the Earth and the climate justice NGO Notre Affaire à Tous, which accused BNP Paribas of giving loans to major oil and gas companies.

The court declared the action inadmissible, as the plaintiffs had not formally notified the companies and urged them to comply with their obligation of vigilance before summoning them before the court, a requirement of the Duty of Vigilance Law.

Jean-Philippe Foegle, Sherpa’s advocacy and litigation officer, told Mongabay that as a civil law, the Duty of Vigilance has a major limitation: It requires victims to prove in court the relationship between the damage suffered and the role played by the companies.

Foegle said that Sherpa spent the past three years collecting evidence and doing additional case law research to prepare the money laundering complaint. Approaching it through a criminal law lens, he said, provided much greater investigative powers, such as performing searches and seizures.

“To our knowledge, it’s the first time in Europe and maybe in the world that an NGO is using money laundering as a legal basis against a bank that finances the agro-industry,” Foegle said.

Earlier this year, the French Prosecutor’s Office raided the offices of five French banks for suspected tax fraud, including BNP Paribas and the investment bank arm of BPCE, both of which were included in the coalition’s complaint. Foegle said this was positive, as it showed the PNF’s willingness to use its investigative powers.

Read full report: https://news.mongabay.com/2023/11/french-banks-accused-of-money-laundering-linked-to-amazon-deforestation/amp/