French bank admits breaching US sanctions

French bank BNP Paribas pleaded guilty on Wednesday to criminal charges for violating US sanctions against blacklisted countries including Iran and Sudan, as part of a record $8.9 billion settlement.

French bank admits breaching US sanctions
French bank BNP pleaded guilty on Wednesday to US charges that it breached sanctions imposed on Sudan and Iran. Photo: Don Emmert/AFP

US prosecutors say France's largest bank deliberately hid thousands of transactions with the two countries, as well as Myanmar and Cuba, between 2004 and 2012, in what officials called a "complex and pervasive scheme" that top bank managers knew broke US law.

The guilty plea was made after a nearly two-hour hearing before US District Judge Lorna Schofield, with the bank admitting it conspired to violate the International Emergency Economic Powers Act and the Trading with the Enemy Act.

The US Justice Department unveiled the record fine on June 30, when BNP agreed to admit its guilt.

Other major banks such as Credit Agricole, Deutsche Bank and UniCredit fear they could be next in the cross-hairs of the US authorities.

Schofield accepted the plea deal as "fair and appropriate" after questioning the bank's general counsel Georges Dirani at length to make sure BNP had not been forced into accepting the agreement.

In the United States, a judge must approve any agreement involving the authorities. Very few deals involving banks have been rejected in recent years.

A final hearing is set to take place on October 3 to discuss details about the sanctions.

As part of the settlement, BNP will pay $8.83 billion as forfeiture of gains, split among several US agencies and authorities, and a $140 million fine.

It also agreed to give up US dollar clearing operations through its New York branch and other affiliates for one year in certain business lines like oil-related transactions, where officials say much of the misconduct took place.

And the bank is letting go of 13 employees, five of them top-level executives, including chief operating officer Georges Chodron de Courcel, who resigned in early June.

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US hits French banking giant BNP with $246 million fine

US regulators have fined French banking giant BNP Paribas $246 million for the bad behaviour of its traders.

US hits French banking giant BNP with $246 million fine
Photo: AFP

US regulators on Monday fined French banking giant BNP Paribas $246 million for poor oversight of its foreign exchange traders who manipulated trading prices.

The move came six months after the Federal Reserve permanently barred former BNP trader Jason Katz from the banking industry, for manipulating foreign exchange prices.

“The firm failed to detect and address that its traders used electronic chatrooms to communicate with competitors about their trading positions,” the Fed said in a statement.

“The Board's order requires BNP Paribas to improve its senior management oversight and controls relating to the firm's FX trading,” the statement said.

BNP said the misconduct occurred between 2007 and 2013 the company has taken steps to strengthen oversight.

“BNP Paribas deeply regrets the past misconduct which was a clear breach of the high standards on which the Group operates,” the company said in a statement.

The Fed also blocked BNP from ever re-hiring any of the former employees involved the incidents, the central bank said.

New York State's Department of Financial Services in May fined BNP $350 million for the same case, accusing traders of “collusive activity” to manipulate currency prices.

The fine also follows the Fed decision in April to fine Germany's Deutsche Bank more than $150 million for similar “unsafe and unsound” foreign exchange trading practices.