US and France's largest bank are close to huge fine over alleged sanctions violations

WASHINGTON – The U.S. government and French bank BNP Paribas are close to a settlement over alleged sanctions violations that would require the bank to plead guilty, pay almost $9 billion in penalties and face other sanctions, a person familiar with the matter said Monday.

The person described the deal as imminent, but said it was not exactly clear when it would be publicly announced. The person spoke only on condition of anonymity because no agreement had yet been finalized.

BNP Paribas, SA, France’s largest bank, has been under investigation for financial transactions through its New York office for clients in Iran, Sudan and Cuba in violation of U.S. trade sanctions. A report by the Wall Street Journal said the bank intentionally hid $30 billion in such transactions, by far more than in any such case so far.

The French economy minister, meanwhile, urged the U.S. Department of Justice to be “fair and proportionate” when deciding on the potential fine. Arnaud Montebourg, speaking on BFM television Monday, said the U.S. has an unfair advantage in the global “economic war” because of a law allowing prosecution of foreign companies for activities outside American soil.

The French government has warned that a huge financial penalty would have an impact on the whole European economy. Two other French banks are under separate investigations for similar activities, and the resulting fines could have repercussions on other companies that do business with those countries as well as the United States.

But the White House this month deflected France’s appeal to intervene, with President Barack Obama saying he was prohibited by separation of powers from getting involved and that he would read about the case “in the newspapers just like everybody else.”

Meanwhile, the bank said this month that a top executive, Chief Operating Officer Georges Chodron de Courcel, would retire in September. His term was to finish in 2016 and the bank did not explain the reason for his departure.

U.S. banking regulators sought the departure of Chodron de Courcel and other executives as part of the investigation.

Shares in BNP were flat in afternoon Paris trading.


Keller reported from Paris.