CJIP Banco Santander: EUR 22.5 Million Fine – Paris Judicial Court, 5 December 2025, Case No. 219-2025

Paris Judicial Court, Section J2 – Financial Crime, 5 December 2025, Case No. 219-2025, Prosecution No. 11 048 092043

The facts and breaches covered by the agreement

The case dates back to 17 February 2011, when Banco Santander itself filed a complaint with the Paris Public Prosecutor. This step followed an internal audit conducted after an altercation in June 2010 between employees and clients at the bank’s Parisian premises on Avenue de l’Opera. What could have been dismissed as a mere incident turned out to be symptomatic of a broader scheme requiring thorough investigation.

The role of BPI Paris in the identified scheme

Banca Personal Internacional (BPI Paris) was a representative office established in 1989 to serve as an interface between Banco Santander and its Spanish clientele residing in France. Comprising five employees, this entity did not carry out any banking activities per se: it could neither open accounts nor conduct banking operations on French territory.

Its official role was limited to three functions: liaising between the bank’s offices in Spain and Spanish clients living in France, responding to their information requests, and generating new business opportunities for Banco Santander’s network in Spain. However, according to the findings of the internal audit, BPI Paris served as a facilitator for a scheme whose characteristics warranted the opening of a judicial investigation.

The mechanisms described in the internal audit

The internal audit report, issued on 20 January 2011, revealed the existence of operations exhibiting irregularities between 2003 and 2010. The investigations identified 87 accounts held by 74 clients displaying serious irregularities. These clients, all Spanish nationals residing in France, used BPI Paris’s services in ways that attracted the attention of the internal audit.

Specifically, according to the terms of the agreement, it was possible for these clients to carry out various transactions that circumvented tax reporting obligations, including the deposit of cheques into Spanish accounts, the receipt of consideration for cash deposits through an informal clearing system between clients, and the making of investments and real estate acquisitions from accounts held in Spain.

The central mechanism relied on the so-called “endorsement” procedure, a common banking practice in Spain allowing the transfer of ownership of a cheque. After being signed on the back (endorsed), the cheque could be deposited into the account of a third party other than the person to whom it was originally made payable. According to the audit findings, none of the clients concerned had disclosed the existence of these foreign accounts to the French tax authorities.

The supervisory failures identified

Banco Santander argued that it had never given any instructions, express or implied, authorising or encouraging such practices, and that its lack of promptness in detecting the conduct was attributable to the circumvention of internal procedures by certain BPI Paris employees.

However, the public prosecutor identified several serious breaches of due diligence and supervisory obligations. According to the agreement, BPI Paris employees did not seek the mandatory approval of the bank’s central offices in Madrid when opening accounts, filled in Know Your Customer forms imprecisely or inaccurately, sent cheques to be credited directly to branches in Spain without depositing them into the French branch’s account, and collected and disbursed cash without using an intermediary bank account.

The public prosecutor emphasised that the failure to detect these activities over a seven-year period, despite supervisory visits conducted at both BPI Paris and the Spanish branches, revealed a manifest lack of due diligence on the part of the bank with regard to its anti-money laundering obligations.

The legal framework of the CJIP: an alternative to criminal trial

What is a judicial public interest agreement?

Introduced in France by the Sapin II Act of 2016, the judicial public interest agreement (CJIP) is an innovative tool of negotiated criminal justice. It enables the public prosecutor to offer a legal entity (company, association, etc.) under investigation for certain offences the opportunity to enter into an agreement before any trial.

Article 41-1-2 of the French Code of Criminal Procedure strictly governs this mechanism. A CJIP may be offered for offences including corruption, influence peddling, money laundering from tax fraud, tax fraud itself, and several other serious economic and financial offences. In exchange for the dropping of criminal proceedings, the legal entity undertakes to pay a public interest fine to the Treasury and, where applicable, to submit to a compliance programme under the supervision of the French Anti-Corruption Agency (AFA) for a maximum period of three years.

The conditions for judicial validation

A CJIP can only enter into force after validation by the president of the judicial court. This validation is not a mere formality: the judge must conduct a public hearing of the legal entity under investigation, assisted by its counsel, and, where applicable, of the victim.

During this hearing, the judge verifies several essential elements: the regularity of the proceedings, the appropriateness of resorting to this procedure rather than a conventional criminal trial, the compliance of the fine amount with the statutory limits (maximum 30% of average annual turnover over the last three years), and the proportionality of the measures envisaged to the advantages derived from the identified breaches.

In the Banco Santander case, the public hearing took place on 5 December 2025 before the president of the Paris Judicial Court. The company acknowledged the “identified breaches” and accepted the principle of the agreement. The public prosecutor justified the appropriateness of resorting to this procedure and detailed the calculation of the advantages derived from the breaches.

In accordance with the provisions of Article 41-1-2 of the French Code of Criminal Procedure, the validation order does not entail a declaration of guilt and has neither the nature nor the effects of a conviction judgment. It nevertheless constitutes an official acknowledgment of the bank’s breaches of its due diligence and supervisory obligations, and carries significant financial consequences.

Calculation of the public interest fine

The criteria for determining the amount

The amount of the public interest fine must be set in proportion to the advantages derived from the identified breaches, up to a maximum of 30% of the average annual turnover calculated over the three most recent annual turnovers known at the date of identification of these breaches.

For Banco Santander, the average turnover over the relevant period (years 2022, 2023, 2024) amounted to EUR 17.884 billion. The theoretical maximum fine was therefore EUR 5.365 billion. The fine ultimately imposed amounts to EUR 22.5 million, approximately 0.42% of the theoretical ceiling.

Within the meaning of Article 41-1-2, the “identified breaches” consist of the bank’s late detection of transactions exhibiting irregularities. These breaches relate both to the proceeds of reporting failures and to the misappropriation of assets through the inter-client clearing system. A single sum could correspond to several proceeds. Moreover, a single proceed may have given rise to several successive transactions, with the collected funds then being used for various purposes.

The advantages derived from these breaches are difficult to assess on a precise accounting basis. They result from the sum of taxes or social contributions evaded by the clients, from the misappropriation of assets through the clearing system, and from the income and other advantages derived by the bank from the operation of the disputed accounts over the relevant period.

Banco Santander argued that the advantages derived were limited solely to commissions, fees, and interest received from the opening and operation of the disputed accounts. The audit report estimated that the total amount of credit transactions on accounts identified as exhibiting irregularities amounted to EUR 49,038,257.11 for the period from 1 January 2003 to 31 December 2010.

Payment terms

Payment of the public interest fine is structured in instalments to take into account the company’s financial capacity. In the case of Banco Santander, the EUR 22.5 million fine is payable to the public accountant within twelve months from the date on which the judicial public interest agreement became final.

This payment is made in three instalments of EUR 7.5 million each as follows: a first payment no later than ten days from the date on which the agreement becomes final, followed by two additional payments, each made six months after the preceding payment.

The agreement specifies that payment shall be made under the conditions set out in Article R. 15-33-60-6 of the French Code of Criminal Procedure, within twelve months from the date on which the agreement becomes final pursuant to paragraph 10 of Article 41-1-2 of the French Code of Criminal Procedure.

The legal effects of the CJIP for the bank and victims

The absence of criminal conviction

One of the major aspects of the CJIP for the legal entity under investigation lies in the absence of criminal conviction. The validation order issued by the president of the judicial court constitutes neither a declaration of guilt nor a conviction judgment. It therefore does not result in any entry in bulletin No. 1 of the company’s criminal record.

This absence of conviction has significant practical consequences for Banco Santander. The bank avoids the collateral sanctions that could result from a final criminal conviction, such as debarment from certain public procurement contracts, revocation of banking licences, or difficulties in its international business relationships.

It should be emphasised that the CJIP in no way prejudges the individual liability of natural persons who may have been involved in the facts. These persons benefit from the presumption of innocence and no conclusion may be drawn from the present agreement as to their possible guilt. Only the liability of the legal entity in respect of its breaches of due diligence and supervisory obligations is covered by this procedure.

Nevertheless, the CJIP is public. The validation order, the amount of the public interest fine, and the agreement itself are published on the websites of the Ministry of Justice and the Ministry of the Budget. The bank is also the subject of a press release from the public prosecutor. This publicity aims to ensure the transparency of negotiated criminal justice and to enable democratic oversight of its use.

The rights of potential victims

The question of compensation for victims’ harm constitutes a sensitive aspect of the CJIP mechanism. In the case of Banco Santander, the French State confirmed at the hearing that it is not claiming compensable damages in respect of the facts covered by the agreement.

On 28 November 2025, the Public Prosecutor at the Paris Judicial Court had informed the head of the Legal Security and Tax Audit Department of the Directorate-General of Public Finances that the conclusion of a CJIP with Banco Santander was being considered. She had invited him to indicate whether his department intended to seek compensation for harm. By letter from its counsel dated 2 December 2025, the State replied that if such an agreement were concluded, it would not claim compensable damages in respect of the facts covered by the CJIP.

This position is explained by the very nature of the offences in question. The breaches harm the general interest and public finances, but it is difficult to quantify a direct and certain harm attributable exclusively to the bank’s breaches in the late detection of the disputed transactions. The sums primarily concern the tax obligations of the clients themselves.

However, the CJIP does not prevent potential victims from seeking recovery of damages through civil proceedings. The validation order expressly states that the victim may, in light thereof, seek recovery of the damages that the legal entity has undertaken to pay through the payment order procedure, in accordance with the rules set out in the French Code of Civil Procedure.

In view of the acknowledgment of the breaches, their age and the cooperation of the management of the legal entity, but taking into account the seriousness of these breaches, the court considered it justified to validate the judicial public interest agreement and to set the amount of the public interest fine at EUR 22.5 million.

This decision is part of a broader trend of strengthening the fight against money laundering. It reminds banking institutions of the crucial importance of their due diligence obligations, international financial flow monitoring, and suspicious transaction reporting. The liability of banks is not limited to that of their clients: they must implement effective internal control systems, train their teams, and respond promptly when irregularities are detected.

For victims of similar banking breaches, this case illustrates the difficulty of having direct harm recognised and obtaining compensation within the framework of a CJIP. If the State itself declines to claim compensable damages, individuals who consider themselves harmed will have to pursue civil proceedings to obtain compensation, which requires proving a direct causal link between the bank’s breaches and their personal harm.

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