The French bank repeatedly broke longstanding sanctions against Sudan, Cuba, and Iran and engaged in a “complex and pervasive scheme to illegally move billions through the US financial system", the attorney general at the US Justice Department, Eric Holder said in a press statement.
He said BNP went to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive US authorities.
“They used ‘cover payments’ to hide the involvement of sanctioned entities in transactions that were processed through New York and elsewhere in the United States. They worked with partners and subsidiaries around the world to structure transactions in needlessly complicated ways – using sophisticated techniques that served no legitimate business purpose, but that allowed them to obscure the truth.”
Through these widespread illegal practices, BNP “knowingly processed more than $500 million in illicit US dollar transactions involving a company controlled by an Iranian energy group – headquartered in Tehran and owned in full by an Iranian citizen".
The bank also processed thousands of transactions – totaling more than $1.7bn – with sanctioned entities in Cuba.
BNP also enabled the Government of Sudan and related institutions to engage “in billions of dollars in illegal transactions”, Holder said.
In its own statement, BNP said that it had “designed new robust compliance” measures to prevent a repeat of the wrongdoing. “We deeply regret the past misconduct that led to this settlement,” said the bank’s chief executive, Jean-Laurent Bonnafé.
Filippo Alloatti, senior credit analyst at Hermes Fund Managers said: “The fine almost doubles the combined settlements that the Office of Foreign Assets Control, one of the US authorities imposing the penalty, has previously reached with banks. BNP Paribas’ solid balance sheet and strong earnings, however, should enable it to bear the initial impact.”
To read more about how Europe’s biggest banks are facing estimated fines of $103.5bn from regulators around the world, click here.
