The Wall Street Journal reports that U.S. prosecutors have reached a settlement over fraud claims at BNP Paribas (BNP) that will see France’s largest lender temporarily banned from handling transactions in U.S. dollars.
Citing unidentified people close to the probe, the publication says BNP faces a fine of between $8 billion and $9 billion for allegedly covering up $30 billion-worth of transaction that violate U.S. sanctions. The dollar-trading ban would last several months, the report notes. Earlier in the negotiations, France’s President Francois Hollande called the U.S. demands “unfair” and “disproportionate”, and said the ban on transacting in U.S. dollars threatens not just the bank but economic stability of the euro zone.
The New York Department of Financial Services has also demanded a guilty plea from BNP to a criminal charge of conspiring to violate the International Emergency Economic Powers Act, as well as the firings of 30 employees-said to be involved in the allegedly illicit trades.
U.S. prosecutors claim that BNP used regional overseas banks between 2002 and 2007 to route funds linked to companies and government agencies based in Sudan—at a time when the nation was being accused by the U.S. and its allies of committing genocide in that country’s Darfur region.
Overall, U.S. authorities scrutinized more than $100 billion of transactions that raised suspicions before finding evidence that $30 billion was intentionally hidden by the Paris-based bank to avoid detection by sanctions enforcers. While the majority of those transactions involved Sudan, the report notes that BNP also facilitated such transfers for Iran and other sanctioned countries.
The fine would make BNP Paribas the second major European bank to plead guilty in the U.S. this year. In May, Credit Suisse Group AG (CS) agreed to pay $2.6 billion.