BNP Paribas: record fine but no instant trading ban

Jun 30, 2014

French bank gets a six-month delay to prepare for ban in trading dollars


BNP Paribas is expected to plead guilty to violating US sanctions against "rogue nations" and accept a record $8.9bn fine later today, but the French bank has won itself a last-minute reprieve on a further punishment.

Quoting Bloomberg, The Daily Telegraph says a "person with direct knowledge of the matter" has confirmed that BNP Paribas will be given six months to prepare for a year-long ban on handling certain dollar transactions.

The bank is alleged to have hidden about $30bn in transactions involving Sudan, Iran and Cuba. The US Department of Justice sought to impose the largest fine of any kind every levied in the US – $10bn – but after negotiations with the bank, this has been reduced.

The bank could be seen as getting off lightly, says The Guardian. The vast fine equates to 27-30 cents for every dollar of alleged illegal activity.

In 2013, Royal Bank of Scotland paid $3.13 per dollar transacted for sanctions violations

However, French President Francois Hollande said that the ban on dollar trading is a disproportionate punishment and could destabilise the entire banking sector in Europe, according to the Wall Street Journal.

The dollar-clearing ban could impact on oil and gas transactions and will affect the bank's operations in Geneva, where the alleged sanctions-busting transactions took place.

BNP Paribas now has six months to prepare for the effects of the ban.

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