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France calls US €7bn fine on BNP-Paribas ‘unreasonable’

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France’s Foreign Minister Laurent Fabius on Tuesday said it was “unreasonable” for the United States to seek more than €7.4 billion in penalties from French bank BNP-Parisbas for allegedly evading American sanctions on Iran, Sudan and Cuba.


In the first public comments by a senior French official on the high-profile case, Laurent Fabius said in a television interview that the figure sought by the US was not justified.

"If there was a fault, then it is normal that there be a sanction, but the sanction has to be proportionate and reasonable. These figures are not reasonable," he said.

Fabius said the US should deal with the issue as partner and not unilaterally.

If the fine is realised, it would be among the largest penalties ever imposed on a bank and is far higher than what BNP has provisioned for.

Last year BNP – the largest publicly traded French bank – set aside €789 million to resolve the US sanctions case. But in its first-quarter earnings report in late April, BNP noted "a possibility that the amount of the fines could be far in excess of the amount of the provision".

The Wall Street Journal last week cited sources as saying that BNP is seeking to pay less than €5.9 billion.

Citigroup analysts said a €7.4 billion settlement figure would represent a "hit" of around 5 percent to the bank's tangible book value and result in a €5 per share impact on the fair value of BNP Paribas stock.

Justice Department pressing bank to plead guilty

The US Justice Department and BNP are reportedly currently discussing whether the French banking giant, as part of its punishment, would be temporarily denied the right to transfer money into and out of the United States – a central part of any foreign bank's business dealings in the US.

The report said Justice Department prosecutors continue to press the bank to plead guilty to the charges, which theoretically could risk its US banking license. North America is a key part of BNP's new strategy to increase profits outside Europe. It aims for the region to account for 12 percent of its 2016 revenues, up from 10 percent in 2013.

A person familiar with the negotiations said in May that US prosecutors were insisting not only that it plead guilty to charges that it did business with parties in Iran, Sudan and elsewhere that were under US sanctions, but also that they fire 12 employees involved in the transactions.

In a separate case last week involving a bank that helped thousands of Americans avoid taxes, Switzerland's Credit Suisse pleaded guilty to one felony charge and was fined $2.6 billion (€1.9 billion) but was allowed to keep its banking license.

That was the first time in 20 years a major bank had been convicted on US criminal charges.


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