News / Economy

BNP Nears Up to $9B Settlement With US Authorities

FILE - The logo of BNP Paribas is seen on the bank's building in Paris, May 30, 2014.
FILE - The logo of BNP Paribas is seen on the bank's building in Paris, May 30, 2014.
Reuters
French bank BNP Paribas SA is likely to pay $8 billion to $9 billion as part of a potential settlement with U.S. authorities over violations of sanctions, according to a person familiar with the matter.
 
U.S. authorities are investigating whether BNP evaded U.S. sanctions relating primarily to Sudan between 2002 and 2009, and whether it stripped out identifying information from wire transfers so they could pass through the U.S. financial system without raising red flags, sources have said.
 
The size of the potential fine has been a source of tension between France and the United States, with French President Francois Hollande warning against a “disproportionate” penalty that might damage France's biggest listed bank.
 
A big penalty could not only hit BNP's capital position and dividend, but could weaken its attempts to expand in North America as it strives to raise revenue and profits outside its traditional European markets.
 
The U.S. investigation has turned up books and records violations in transactions involving Sudan, Iran and Cuba, a source familiar with the matter said on Sunday.
 
A BNP spokeswoman declined to comment.
 
French Finance Minister Michel Sapin on Monday did not comment on a possible deal, but repeated the French position that any penalty should be fair and proportionate.
 
“The French state, the government... has played its role in telling the Americans: 'Be careful - by all means punish the past but don't punish the future,'” he told France Info radio.
 
Earlier in the month, Reuters reported that U.S. authorities negotiating with BNP at one point suggested a penalty as high as $16 billion, although that was viewed as a negotiating tactic in response to an offer from BNP of about $1 billion.
 
BNP, the biggest collector of investment-banking fees in France according to data from Thomson Reuters and Freeman Consulting, has been negotiating on an almost daily basis with U.S. authorities for weeks.
 
Guilty plea?

 
The potential settlement could include BNP pleading guilty to a criminal charge of violating the International Emergency Economic Powers Act, another source familiar with the matter has said. The potential settlement was first reported by the Wall Street Journal.
 
A further source close to the situation said BNP could accept a guilty plea, but it was unclear if any charge would be against the parent group or at a subsidiary level, such as the Swiss unit including its Geneva commodity trading center.
 
BNP was the world's top financier of commodity trading throughout the 1990s and 2000s. However, it has drastically reduced staffing in its Geneva and Paris offices over the past two years as it cut some of its riskier business and studied implications of the U.S. investigation, BNP insiders and senior trading executives have told Reuters.
 
BNP's revenue targets for its trade financing business could be missed due to the investigation, analysts at Jefferies said in a note last week, citing the risk of it losing business.
 
The bank faces other penalties such as being suspended from clearing clients' dollar transactions, sources close to the situation have said. A source familiar with the matter said on Monday parties were still negotiating the duration of any ban.
 
The U.S. investigations are being conducted by authorities including the U.S. Justice Department, the U.S. Attorney's office in Manhattan, the U.S. Treasury Department, the Manhattan District Attorney's office, and the New York Department of Financial Services.
 
The New York Department of Financial Services, which oversees certain banks in New York, would not revoke the bank's license to operate in New York if BNP agreed to other stiff penalties, a source has said.
 
The state regulator has sought the termination of more than a dozen employees as part of the settlement, at least some of whom have already left.
 
Shares in BNP were little changed at 1500 GMT.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.