BNP to plead guilty to dodging US sanctions: report
June 28, 2014, 12:03 am TWN
NEW YORK--U.S. authorities are set to announce Monday a deal in which the French bank BNP Paribas pleads guilty to helping some countries to avoid U.S. sanctions and agrees to pay an US$8.9 billion fine, the New York Times reported Friday.
Such a guilty plea by a major financial institution, in this case France's biggest bank by market capitalization, is rare, the Times said.
At the request of U.S. authorities, BNP has severed ties with a dozen employees, including two senior executives. But no one at the bank has been charged, the newspaper said, quoting people briefed on the case.
The deal with federal and New York state authorities had not been signed as of Thursday but barring a last minute obstacle U.S. authorities hope to announce it at a press conference on Monday, the Times said.
The case concerns charges that BNP Paribas breached U.S. sanctions against Iran, Sudan and Cuba between 2002 and 2009 by handling US$30 billion worth of transactions with them.
The admission of guilt could have meant the bank would lose its license to operate in the United States.
Instead, the New York state financial regulator, Benjamin Lawsky, has taken aim at the bank's ability to engage in dollar clearing — processing payments in dollar denominations. This key to dealing with international clients, the paper said.
Some units within the bank's headquarters in Paris, and in its offices in Geneva and Singapore, will be barred from clearing dollar transactions for at least six months, the Times said.
The bank's oil and gas unit is among those that face the suspension. It was involved in many of the illegal transactions in this case.
While most of the illicit transactions took place from 2002 to 2009, some stretched into 2012 while the U.S. government had already launched its investigation, the Times said.
The French government has raised the matter several times at the highest level of U.S. authorities, including with President Barack Obama.
France argued that a fine reported possibly to exceed US$10 billion would be so disproportionate as to endanger negotiations between the European Union and United States over a free-trade agreement.
They also argued that such a big fine would so weaken the bank as to cause a risk knock-on effects through the banking system, although some analysts were skeptical about this.