BNP Paribas fined $9bln on sanc­tions vi­o­la­tions

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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