France's largest bank allegedly dodged sanctions for a period of seven years. Now it faces an unprecedented fine from the US government.
The U.S. Justice Department is expected on Monday to reach a settlement with BNP Paribas involving a record fine of nearly $9 billion (6.6 million euros) over alleged US sanctions violations.
US authorities are investigating whether BNP, France’s largest bank, dodged U.S. economic sanctions in Cuba, Sudan and Iran between 2002 and 2009, sources familiar with the matter said. It was suspected to have hidden up to $30 billion in transactions.
The bank is poised to plead guilty to a criminal charge in Manhattan Federal Court on Monday and the US Justice Department is planning a news conference in Washington to announce a deal later in the day, sources said.
Among the penalties levied, BNP may be banned from converting foreign currencies to dollars on the behalf of clients for as long as a year, affecting its dividend payout, regulatory capital rations and its investment banking targets.
Still, the lender is expected to hold on to its banking license from the New York state banking regulator.
BNP shares have plummeted by 17 percent since the company first announced in mid-February that the fine could reach $1.1 billion. The bank's last public comment was May 14 when it stated the fine could be stiffer than what it originally provisioned.
"I want to say it here: we will receive a heavy penalty," BNP's CEO Jean-Laurent Bonnafe told staff in an internal memo acquired by Reuters. "However, the difficulties that we are currently experiencing must not affect our plans for the future."