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French anger over mooted US fine

June 3, 2014

French Foreign Minister Laurent Fabius has called a reported $10-billion US fine for French banking giant BNP Paribas "unreasonable." The bank has been negotiating with US authorities for months.

BNP Paribas Bank
Image: picture-alliance/dpa

Fabius told French TV channel France 2 that a $10-billion (7.4-billion-euro) penalty for allegedly breaking sanctions rules was "unreasonable and disproportionate."

He also said that such a hefty fine could have a serious impact on already tricky negotiations over a transatlantic free trade agreement (TTIP)."This commercial partnership can only be established if it's based on reciprocity," Fabius told France 2.

If the US levied the penalty on one of Europe's biggest bank, as reported by the Wall Street Journal last Thursday, it would be a "unilateral and unjust" decision, the minister said.

The US Justice Department and BNP, which is France's biggest lender, declined to comment on the report.

BNP Paribas is alleged to have violated US sanctions in place against Sudan, Iran and Syria between 2002 and 2009. The bank has been negotiating with US authorities for months on a settlement for a criminal probe relating to those charges.

BNP is one of several banks being probed. The alleged fine would be the biggest ever paid for similar offenses by any big bank.

BNP shares plunged last Friday, after the Journal report was published, dragging down the bluechip CAC40.

Some analysts fear that a hefty fine could erode the bank's capital, as it has only made a $1.1-billion provision for this case. Press reports say that US authorities may also consider temporarily restricting the bank's ability to process dollar transactions.

US authorities have hit European banks with a number of fines recently. Credit Suisse last week agreed to pay a 2.6-billion-dollar fine after pleading guilty to assisting US taxpayers in filing false income tax returns.

US authorities can fine non-US banks who either have US subsidiaries or simply make transactions in US dollars.

ng/hg (Reuters, AFP, dpa)