June 2, 2014 / 3:48 PM / 4 years ago

France wary of politicizing U.S. probe into BNP Paribas

PARIS (Reuters) - 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.

The logo of BNP Paribas is seen on the bank's building in Paris, May 30, 2014. REUTERS/Charles Platiau

To date, government ministers have said little about BNP Paribas’ negotiations with U.S. authorities investigating whether it evaded U.S. sanctions related primarily to countries Sudan, Iran, Syria between 2002 and 2009.

Even normally outspoken figures such as Economy Minister Arnaud Montebourg, who criticized a recent General Electric bid for French energy group Alstom’s energy assets, held back when asked if he was surprised by the U.S. move.

“I cannot, I cannot, I cannot make any comments at this stage. This is impossible, not now,” he told Reuters during a visit in the south of France.

U.S. authorities allege the bank 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 over $10 billion and other penalties, such as a guilty plea and possible temporary suspension of the bank’s authority to clear U.S. dollar transactions.

Charles de Courson, secretary for the finance committee of the lower house of parliament, said the issue seemed linked to “a political tug of war” in the Obama administration. “We need to be careful in order not to fall into a trap,” he said.

Karine Berger, another member of the committee, said: “The United States has a very firm position, especially towards Iran, and this is an unacceptable situation for them if BNP has truly approved dollar transactions to Iran.”


According to Les Echos newspaper on Monday, President Francois Hollande will raise the issue with his U.S. counterpart Barack Obama when they meet at World War Two 70th anniversary commemorations in Normandy, northern France, later this week.

Hollande’s office declined to comment on whether BNP Paribas was on the agenda of his meeting with Obama on Thursday.

A finance ministry official told Reuters: “The procedure, engaged in by the United States is an affair between a private company and U.S. justice. The finance minister is regularly kept informed of developments.”

New York state’s top banking regulator, Benjamin Lawsky, wants to see some senior executives fired for their roles, two sources familiar with the matter said on Saturday.

“If this is proved, the French government should certainly not interfere. Or it could give an impression that France takes a political position vis-a-vis the Middle East,” said Berger.

BNP has lost over 6 billion euros of market capitalization since end-April on investor fears the bank may rethink its dividend payout policy, currently at 45 percent of earnings, on the back of a possible slide in capital solvency and changes to the business model in case of a heavy fine.

A similarly low-profile approach was adopted by Britain’s finance minister George Osborne 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.

Osborne made a series of phone calls to U.S. Treasury Secretary Timothy Geithner to express concern at the way details of the case came out, after Lawsky called Standard Chartered a “rogue institution” for breaking U.S. sanctions.

French central bank governor Christian Noyer said last month that French regulators were closely watching the affair, but had no evidence French or United Nations rules had been broken.

France’s No.2 listed bank Societe Generale and No.3 Credit Agricole are also cooperating the U.S. authorities by conducting internal reviews of payments denominated in U.S. dollars involving countries or individuals that could be subject to the U.S. economic sanctions.

Additional reporting by Jean-Francois Rosnoblet in Marignane, Leigh Thomas in Paris and Steve Slater in London; Writing by Maya Nikolaeva; Editing by Andrew Callus and Tom Heneghan

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