Exclusive: BNP hands years of oil trading files to U.S. in $10 billion probe

Mon Jun 16, 2014 9:08am EDT
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By Ron Bousso and Dmitry Zhdannikov

LONDON (Reuters) - French bank BNP Paribas (BNPP.PA: Quote), which is facing a potential $10 billion fine for breaking U.S. sanctions, has handed over to U.S. investigators files covering many years of its dealings with leading companies in the oil market.

A dozen former BNP insiders and senior trading executives said it had in recent months handed over a host of documents relating to its oil dealings with Sudan and Iran, including details on trading houses' and oil majors' involvement in the trades.

Before now, all that had been known about the probe was that U.S. authorities were investigating whether BNP evaded sanctions relating to Sudan, Iran and Cuba and if it stripped identifying information from related dollar wire transfers to be cleared by the U.S. financial system.

BNP declined to comment. It has said publicly only that it is in discussions with U.S. authorities about "certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions".

The sources told Reuters that the probe has so far mostly focused on the bank's dollar financing of oil trade out of Sudan - a much smaller producer than Iran - between 2002 and 2009, long after Washington imposed sanctions against the government in Khartoum in 1997 over human rights violations. It extended the sanctions in 2007.

They said BNP provided the lion's share of trade financing to Chinese companies including Sinopec (600028.SS: Quote) and CNPC, which were the main importers of Sudanese crude during the period. The Chinese companies declined to comment.

Sudan's oil production rose from around 200,000 barrels per day (bpd) in 2000 to a peak of almost 500,000 bpd in 2010, according to U.S. Energy Information Administration data.

Although China was and remains the main importer of crude from Sudan, BNP also provided trade finance to major global trading houses such as Trafigura and Vitol, which were also involved in trading Sudanese oil at the time.   Continued...

An employee walks behind the logo of BNP Paribas in a company's building in Issy-les-Moulineaux, near Paris, June 2, 2014. France is wary of speaking out about a U.S. criminal probe into BNP Paribas putting bilateral ties ahead of a threatened $10 billion-plus fine for its biggest listed bank, lawmakers indicated on Monday.   REUTERS/Charles Platiau (FRANCE - Tags: BUSINESS LOGO) - RTR3RVEQ