01 July 2014
Details of the settlement reached by French bank BNP Paribas demonstrate that the US authorities will continue to take a hard line on sanction violations and money laundering.
The record penalty imposed ($8.97 billion) reflects the $8.8 billion from sanctioned sources – namely Sudan, Iran, and Cuba – which the bank moved through the US financial system.
US Attorney General Holder said ‘BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive US authorities…. If sanctions are to have teeth, violations must be punished’.
In addition to the fine, the bank also agreed to ‘terminate or separate from the bank’ a total of 13 employees – including the Group Chief Operating Officer and other senior executives. Certain US dollar clearing operations through the New York Branch and other affiliates, will also be suspended for one year.
In a statement, Jean-Laurent Bonnafe, CEO of BNP Paribas, expressed regret and announced ‘a comprehensive plan to strengthen our internal controls and processes, in ongoing close coordination with the US authorities and home regulator [Autorité de Contrôle Prudentiel et de Résolution – ACPR].’
The measures introduced by the bank include the creation of a new department, Group Financial Security US, with responsibility for global compliance with US sanctions and embargoes.
Bonnafe offered reassurance to investors that despite these issues, ‘BNP Paribas will once again post solid results this quarter’.