BNP Paribas fined $9bln on sanctions violations
French banking giant BNP Paribas has been slapped with a record $9 bln fine in a settlement with US prosecutors over allegations of sanctions violations.
The bank has agreed to plead guilty to two criminal charges of breaking US sanctions against trade with Sudan, Iran and Cuba between 2004 and 2012.
It will also be prevented from clearing certain transactions in US dollars for one year from the start of 2015.
US Attorney General Eric Holder said that BNP engaged in “a complex and pervasive scheme to illegally move billions through the US financial system.”
In doing so, the bank “deliberately and repeatedly violated longstanding US sanctions,” he said. Holder added that he hoped the settlement would serve as a warning to others that did business with the US that “illegal conduct will simply not be tolerated.”
As part of deal, BNP agreed to fire and not individuals who were associated with the violations.
BNP said as a result of the fine it would take an “exceptional charge” of 5.8 bln euros in the second quarter of this year, on top of the $1.1 bln it had already set aside to cover the cost of the US penalties.
However it expected “no impact on its operational or business capabilities”, and said it would post “solid results” for the second quarter. BNP’ CEO Jean-Laurent Bonnafe said re-hire 13 sanctions resolving the issue was “an important step forward” for the bank. In a conference call on Tuesday morning, Bonnafe explained that during the year in which the bank was banned from dollar clearing, it would engage a third party to carry out the transactions.
He said this would represent “quite some work” to set this up and that they had been given six months to do so but added that as part of the settlement BNP Paribas would be able to keep its licence to operate in the US.
The Swiss financial regulator, FINMA, also announced that it had closed its investigation into BNP Paribas operations in the country, following the US authorities’ decision.