Group items tagged

France's biggest bank BNP Paribas is facing a record-breaking $8.9bn (£5.2bn) fine from US authorities for allegedly transferring billions of dollars on behalf of Sudan and other countries blacklisted by the US."I want to be clear, we will be punished severely," Jean-Laurent Bonnafe, BNP chief executive, wrote in a memo to staff that emerged this weekend.The US Justice Department is expected to announce the fine and a potential ban from clearing dollar trades for one year at a Manhattan court later on Monday.Details of the US investigation are expected to show BNP Paribas hid the names of clients from blacklisted countries when processing $30bn in transactions through America. Most of the transfers involved Sudanese clients between 2002-2009, but some potentially illegal activity was happening as recently as 2012 while the US investigation was ongoing. The bank is expected to plead guilty.

The $8.9bn fine would be the largest penalty levied by US authorities against a foreign bank, far outstripping the $1.97bn HSBC paid out in 2012 after a US Senate investigation into the bank's role in money laundering for Mexican drug cartels and helping blacklisted clients evade US sanctions. However, BNP Paribas could be seen as getting off relatively lightly: calculations by the Wall Street Journal show that BNP fine equates to 27-30 cents for every dollar of potentially illegal activity, compared with $3.13 per dollar paid out by RBS in 2013 for sanctions busting.On top of the fine, BNP is likely to be banned from clearing US dollar transactions for one year, a damaging blow to its international business.

BNP Paribas earned €39bn in 2013, but profits fell sharply in the final quarter when it reported that it had set aside $1.1bn to pay a fine over US sanctions.