Lafarge SA, the French cement multinational now operating under the Holcim group, has pleaded guilty in the Eastern District of New York to conspiracy to provide material support to designated foreign terrorist organisations. It is the first time in U.S. history that a corporation has been convicted of this charge.
The company admitted that its Syrian subsidiary, Lafarge Cement Syria (LCS), made payments totalling approximately $5.92 million to ISIS and Jabhat al-Nusra between August 2013 and October 2014. The payments were made to ensure the continued operation of LCS’s cement plant in Jalabiyeh, northern Syria, as the region fell under the control of armed groups during the civil war.
The DOJ’s statement of facts describes a deliberate commercial calculation. As ISIS expanded its territorial control in 2013, Lafarge’s Syrian executives negotiated a series of arrangements with local intermediaries who facilitated payments to armed groups in exchange for safe passage of employees and raw materials, and for permission to continue selling cement in ISIS-controlled areas.
The payments took several forms. Some were direct cash payments through intermediaries. Others involved the purchase of raw materials — pozzite andite — from ISIS-controlled quarries at inflated prices, with the markup constituting a de facto levy. Lafarge also paid for the right to continue operating roadway checkpoints and for the release of detained employees.
Senior executives at Lafarge SA in Paris were aware of the arrangement. Internal communications show that the Syria-related security payments were discussed at executive committee level. The DOJ noted that Lafarge’s revenue from the Jalabiyeh plant during the relevant period was approximately $70.3 million — the payments to terrorist organisations represented the cost of keeping that revenue stream active.
The penalty totals $777.78 million, comprising a $90.78 million criminal fine and $687 million in criminal forfeiture. Lafarge has also agreed to a three-year period of probation with an independent compliance monitor.
French prosecutors at the Parquet national antiterroriste (PNAT) have been pursuing a parallel criminal investigation. A French trial is expected in the coming years.
A financial crime investigator’s view
In over two decades of working on financial crime cases, I have seen sanctions evasion, bribery, and regulatory violations by multinational corporations. But this case is qualitatively different. This is a publicly listed European industrial company that paid money to ISIS — an organisation responsible for mass executions, sex slavery, and the destruction of entire communities — so that it could keep selling cement.
The commercial logic is chilling in its clarity. Lafarge calculated that the revenue from its Syrian plant exceeded the cost of the payments to armed groups, and so the payments were authorised. This was not a rogue employee or a failure of controls. It was a strategic business decision, taken with executive-level awareness, to finance terrorism for commercial advantage.
The fact that this is the first-ever corporate guilty plea for material support to terrorism is itself significant. Prior to Lafarge, the material support statute — 18 U.S.C. § 2339B — had been applied almost exclusively to individuals. The Lafarge prosecution establishes that corporations that transact with designated terrorist organisations will face criminal liability, not just civil penalties or regulatory sanctions.
For compliance professionals, the case raises a difficult question about operating in conflict zones. Companies with operations in unstable regions routinely face demands for payments — to local militias, to government-adjacent armed groups, to criminal enterprises. The standard compliance response is to refuse, even if refusal means abandoning the operation. Lafarge chose a different path, and the result is a criminal conviction that will define the boundaries of corporate accountability in conflict-zone operations for years to come.
What I find most troubling is the duration. These payments were not a one-time crisis response. They continued for over a year, through a period when ISIS was conducting highly publicised atrocities. The world knew what ISIS was in 2013 and 2014. Lafarge knew what ISIS was. And it kept paying.
The $778 million penalty is substantial, but Holcim — the combined entity after its 2015 merger with Lafarge — had revenues of over CHF 29 billion in 2021. The fine represents roughly one quarter’s profit. Whether that is sufficient deterrence for an offence of this gravity is a question worth asking.