France to defend BNP Paribas over US fine threat

Tuesday 03 June 2014 08.01
The US alleges that BNP Paribas violated US sanctions
The US alleges that BNP Paribas violated US sanctions

France's foreign minister has said his country would defend the interests of bank BNP Paribas after sources said it faced the prospect of a $10bn-plus fine from the United States, saying such a penalty was "unreasonable."

"If there is an error or a violation then it's normal that there is a fine, but the fine has to be proportionate and reasonable," Laurent Fabius said on France 2 television.

"These figures are not reasonable," he said.

To date, government ministers have said little in public about BNP Paribas' negotiations with US authorities investigating whether it evaded US sanctions related primarily to countries Sudan, Iran, Syria between 2002 and 2009.

US authorities allege the bank, France's biggest lender, stripped out identifying information from wire transfers so they could pass through the US financial system without raising red flags, sources told Reuters.

Sources familiar with the negotiations said a settlement could include a fine of over $10bn and other penalties, such as a possible temporary suspension of the bank's authority to clear US dollar transactions.

BNP said last month a fine for violating US sanctions could be much higher than the $1.1bn which it provisioned for.

It also said it had improved control processes and was doing what it could to ensure such mistakes did not occur in future.

Mr Fabius said that US decision would raise questions over European Union-US trade negotiations given the agreement should be based on reciprocity.

"But here you would have an example of unfair and unilateral decision. It would be an extremely serious problem."

Mr Fabius' comments come just two days before President Barack Obama is due in France where he will hold bilateral talks with president Francois Hollande.

"These figures could have a negative impact and BNP could see its funds hit and that means less loans especially for French firms," Mr Fabius, who is also in charge of France's trade portfolio, said.

"It's an extremely serious question that the Americans must handle in a spirit of partnership and not unilaterally," he said.