US Justice Department goes APE

BNP Paribas fined more than $9b by US for violating sanctions

Posted 16 minutes ago

BNP Paribas has pleaded guilty to US criminal charges of violating sanctions on Iran, Sudan and other countries and has been fined a record $US8.9 billion ($9.5 billion) to settle the case.

The US Justice Department said the French bank deliberately hid thousands of transactions with the two countries, as well as Myanmar and Cuba, during the period between 2004-2012 in what officials called a "complex and pervasive scheme" and a "serious breach" of US law.

Officials described the fine as the largest penalty ever obtained by the Justice Department in a criminal economic sanctions case, and the largest in any criminal case involving a bank.

"BNP went to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive United States authorities," US attorney-general Eric Holder said.

The violations aided countries involved in terrorism and human rights violations, Mr Holder added, "in many cases to the detriment of United States national security."

The bank agreed to plead guilty to one count of conspiring to violate sanctions, making it the first bank found guilty in a sanctions case.

As part of the settlement, BNP agreed to dismiss or let go 13 employees, including the chief operating officer, who resigned earlier this month.

"This landmark resolution demonstrates the Justice Department's firm commitment to enforcing embargoes and other measures designed to protect America's security and our vital national interests," said Mr Holder.

"This outcome should send a strong message to any institution, any institution anywhere in the world, that does business with the United States, that illegal conduct will simply not be tolerated."

'Severe criminal acts'

Assistant attorney-general Leslie Caldwell linked the severity of the penalty to both the bank's deliberate attempts to hide the activity and its non-cooperation with the investigation.

"Remarkably, BNP continued to engage in this criminal conduct even after being told by its own lawyers that what it was doing was illegal," she said.

"Not only did BNP commit severe criminal acts, but then BNP hindered our ability to prosecute the individuals that engaged in that wrongdoing. It must now accept the criminal consequences of its actions."

Federal Bureau of Investigation director James Comey said the punishment was also a message to shareholders to demand better behaviour from corporate management.

"The $9 billion is your money," he said to BNP investors.

Even if a bank's workers are trained to comply with laws, Mr Comey adds that it is "essential" to have leaders who "send messages of accountability."

The fine was expected to have a large impact on BNP's profits.

However, as France's largest bank by market value, that country's banking regulator ACPR said BNP had the capital foundations to weather the hit.

The agency said in a statement that it had previously examined BNP's liquidity and solvency and found it to be "quite solid".


And yet those behind the GFC continue, in the words of Bob Dylan, "To drink martinis and watch the sunrise".