France takes U.S. to task over BNP Paribas fine

Tue Jun 3, 2014 4:13pm EDT
 
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By John Irish and Karen Freifeld

PARIS/NEW YORK (Reuters) - France stepped up its protests to the United States on Tuesday over a possible $10 billion-plus sanctions busting fine for its biggest bank BNP Paribas (BNPP.PA: Quote), saying such a move could hurt transatlantic free-trade talks.

Foreign Minister Laurent Fabius' warning came two days before French President Francois Hollande hosts President Barack Obama for talks fraught with other sources of possible tension - from General Electric Co's (GE.N: Quote) overtures to emblematic French engineering group Alstom (ALSO.PA: Quote) to differences over Syria and sanctions on Russia.

Until now, Hollande's senior ministers have shied away from commenting on BNP's 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.

But Fabius, whose portfolio includes trade issues, noted the case came just as Washington and the European Union are negotiating a free-trade pact sought after by Obama, and that it would send the wrong signal if BNP's business was damaged.

"If there is an error or a violation then it's normal that there is a fine, but the fine has to be proportionate and reasonable," he told France 2 TV. Sources familiar with the discussions say the fine could be over $10 billion, which would nearly swallow up BNP's 2013 pretax income of 8.2 billion euros ($11.2 billion).

"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," Fabius said. "It's an extremely serious question that the Americans must handle in a spirit of partnership and not unilaterally."

Hollande himself has already expressed concern about BNP's case during a phone call to the White House more than two weeks ago, according to a person familiar with the matter.

U.S. officials said Obama did not plan to bring up BNP at a dinner he is due to have with Hollande on Thursday, and suggested he would deflect entreaties from Hollande. "It's certainly not something we would raise, given that it's a matter for DOJ to handle appropriately," one official said.   Continued...

 
An employee walks behind the logo of BNP Paribas in a company's building in Issy-les-Moulineaux, near Paris, June 2, 2014.  REUTERS/Charles Platiau