French government ministers have until now shied away from
discussing in public BNP' negotiations with U.S. authorities, who
are investigating whether the lender evaded U.S. sanctions relating
primarily to Sudan, Iran and Syria between 2002 and 2009.
"If there is a an error or a violation then it's normal that there
is a fine, but the fine has to be proportionate and reasonable,"
Foreign Minister Laurent Fabius said on France 2 television on
Tuesday. "These figures are not reasonable."
The criticism comes two days before U.S. President Barack Obama
meets President Francois Hollande in Paris, with ties between the
two allies already strained over the United States' handling of the
Syrian crisis and France's reluctance to cancel a deal to sell
helicopter carriers to Russia.
French officials have said Hollande will bring up the BNP issue
during the talks, which Fabius will also attend. Other possible
subjects for discussion could be U.S. conglomerate General Electric
Co's bid for French group Alstom SA's energy assets, a move which
prompted Hollande's government to encourage a rival approach from
Germany's Siemens AG.
U.S. authorities, including New York state's top banking regulator,
the Justice Department and the Manhattan District Attorney allege
BNP stripped out identifying information from wire transfers so they
could pass through the U.S. financial system without raising red
flags, sources told Reuters.
Sources familiar with the negotiations said a settlement could
include a fine of more than $10 billion - almost as much as BNP's
pre-tax income of 8.2 billion euros ($11.2 billion) in 2013 - and
other penalties, such as a possible temporary suspension of the
bank's authority to clear U.S. dollar transactions.
Although the penalty is not set, one source said, negotiations with
BNP were "north of $8 billion," considerably higher than the $1.1
billion which it had previously set aside.
BNP declined comment on the matter on Tuesday. Last month it said it
had improved control processes and was doing all it could to ensure
such mistakes don't occur again.
BNP has lost more than 6 billion euros of its stock market value
since the end of April, reflecting concerns that a heavy fine could
force it to restrain its dividends, reduce lending and even raise
fresh capital to bolster its finances.
"These figures could have a negative impact and BNP could see its
capital hit and that means less loans, especially for French firms,"
The French government, stung by a string of election setbacks, has
sharpened criticism of the United States since the start of the
year, straining ties ahead of Obama's visit this week to commemorate
the World War Two D-Day landings in Normandy, western France.
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Fabius has repeatedly lamented Washington's decision to back away
from launching a military operation in Syria hours before French
jets were ready to strike and has rebuffed U.S. calls for Paris to
cancel a 1.2 billion euro deal to sell Mistral helicopter carrier
ships to Russia. In the BNP case, Fabius' diplomatic plea for
Washington to intervene may fall on deaf ears, as the suit emanates
from the New York State Department of Financial Services (DFS),
which acts independently of the U.S. federal government.
But Fabius, who is also in charge of the trade portfolio, said any
U.S. decision regarding BNP would raise questions over European
Union-U.S. trade negotiations, given any deal should be based on
"Here you would have an example of an unfair and unilateral
decision. It would be an extremely serious problem. You can't
consider reciprocity to be the rule, when at the same time you have
a decision like this," he said.
The United States and the EU are holding talks over a bilateral free
trade agreement intended to deal with issues ranging from
agricultural market access to electronic commerce to investment and
competition policy. France has been sceptical about some issues,
such as any opening of its movies, music and internet markets to
free trade, fearing this could impact jobs and competitiveness.
Other European governments have demurred from confrontation when the
DFS imposed penalties or settlements for bank misdemeanours, albeit
much smaller than in prospect for BNP.
A low-profile approach was adopted by Britainís finance minister
George Osborne for instance to limit the damage faced by Standard
Chartered, after it came under fire from U.S. regulators for
breaching U.S. sanctions, a UK government source told Reuters in
August 2012 when the story broke.
"It's an extremely serious question that the Americans must handle
in a spirit of partnership and not unilaterally," Fabius said.
(Editing by Mark John and David Holmes)
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