French cement company Lafarge pleads guilty to funding Islamic State in Syria

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U.S. Attorney for the Eastern District of New York Breon Peace speaks to the media in New York on Oct. 18. (EDUARDO MUNOZ/REUTERS)

French cement manufacturer Lafarge pleaded guilty in a U.S. court on Tuesday to an allegation that it paid payments to U.S.-designated terrorist organizations, including Islamic State, to continue operations in Syria.

The admission in federal court in Brooklyn was the first time a firm in the United States pled guilty to giving material support to a terrorist organization. As part of the plea agreement, Lafarge, which was acquired by Swiss-listed Holcim in 2015, agreed to pay $778 million in forfeiture and penalty.

Lafarge and its Syrian subsidiary Lafarge Cement Syria, according to U.S. prosecutors, paid Islamic State and al Nusra Front the equivalent of approximately $5.92 million between 2013 and 2014 to allow employees, customers, and suppliers to pass through checkpoints following the outbreak of civil conflict in Syria.

According to authorities, this allowed the business to generate $70 million in sales revenue from a plant it operated in northern Syria.

Following the guilty plea, Breon Peace, the chief federal prosecutor in Brooklyn, told reporters, "Lafarge made a deal with the devil." This behavior by a Western company was abhorrent and without precedent or justification.

The cement plant was eventually evacuated by Lafarge in September 2014, according to U.S. authorities. According to authorities, Islamic State then seized the leftover cement and sold it for the equivalent of $3.21 million.

Tuesday, the chairman of Lafarge, Magali Anderson, said in court that from August 2013 to November 2014, former business executives "knowingly and willingly agreed to participate in a conspiracy to make and authorize payments for the benefit of various armed groups in Syria."

Holcim stated in a statement that none of the conduct included Holcim, "which has never operated in Syria, or any Lafarge operations or employees in the United States, and it stands in stark contrast to everything Holcim represents."

According to Holcim, former Lafarge officials involved in the behavior concealed it from Holcim and external auditors.

Lisa Monaco, the U.S. Deputy Attorney General, stated to reporters, without naming Holcim, that the firm that bought Lafarge did not conduct due diligence on the Syria business.

In the U.S., no Lafarge executives were charged. Monaco stated that French officials have arrested a number of the relevant executives, but did not offer any names. U.S. court documents mention six unidentified Lafarge executives.

Anderson stated in court that the culpable parties had not been employed by the business since at least 2017.

Eric Olsen, the business's first CEO after the merger, resigned in 2017 when the corporation admitted to paying armed factions in Syria. Olsen stated that he was not involved in or aware of the payments at the time.

Tuesday, the Paris-based human rights organization Sherpa denounced the plea agreement. Sherpa's case against Lafarge in France spurred a criminal investigation into whether the business was implicated in crimes against humanity.

Anna Kiefer, director of advocacy and litigation for Sherpa, stated that the arrangement "impedes victims' access to justice and denies them a public trial."

Lafarge denied accusations that it participated in crimes against humanity. A source close to France's anti-terrorism prosecution office told Reuters on Tuesday that the investigation into activities partially conducted in France is still ongoing.

Before the announcement, the SIX Swiss Exchange froze trading in Holcim shares. Following the resumption of trading, the price of the stock climbed by as much as 3.2%.

Publish : 2022-10-19 08:17:00

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