A potential $10 billion fine for BNP Paribas SA (BNP) for breaking U.S. trade sanctions would be unreasonable, said French Foreign Minister Laurent Fabius.
“The fine has to be proportionate and reasonable,” Fabius said on France 2 television today. “These figures are not reasonable.”
The remarks by Fabius, the most senior government official to publicly defend the largest French bank, signal growing indignation in France. President Francois Hollande will raise the BNP matter with Barack Obama when the U.S. president visits France to mark the 70th anniversary of D-Day this week, a French official said yesterday.
U.S. authorities are seeking penalties to settle allegations that BNP transferred funds for clients in violation of sanctions against Sudan, Iran, and Cuba, according to people with knowledge of the investigation. Prosecutors are also pressuring the company to plead guilty, people familiar with the probe have said.
A potential $10 billion fine would exceed the average estimate for BNP’s net income this year of 5.64 billion euros ($7.7 billion), based on a Bloomberg survey of 13 analysts. BNP’s potential penalties would also represent more than three times the combined fines paid by HSBC Holdings Plc (HSBA), Standard Chartered Plc and ING Groep NV (INGA) in 2012.
BNP fell 0.3 percent to 50.91 euros in Paris trading, bringing the decline this year to 10 percent.
“We are in talks with the U.S. for a transatlantic partnership,” Fabius said. “This trade partnership can only be established on a basis of reciprocity. But here you would have the example of a unilateral and unjust decision. Therefore it’s a serious and grave problem.”
A fine of the size the U.S. is said to be seeking would reduce BNP’s capital and could curb its lending, especially to French companies, Fabius said.
French efforts to influence the BNP probe come after Swiss authorities tried to intervene on behalf of Credit Suisse Group AG, which last month agreed to pay $2.6 billion in fines and have a unit plead guilty for helping U.S. citizens evade taxes.
The Alpine nation sought to ensure that “Swiss banks aren’t treated worse than other banks,” the finance ministry, led by Eveline Widmer-Schlumpf, said in a May 3 statement after meeting with U.S. Attorney General Eric Holder.
Hollande, who during his 2012 campaign described the world of finance as “my real enemy,” is now under pressure to speak up for BNP. The right-wing National Front, which beat France’s two mainstream political parties in the May 25 European parliamentary elections, last week called on the government to “defend the national interest” in the case.
Hollande recently phoned the White House to express concerns about the potential settlement, the New York Times reported yesterday, citing people briefed on the matter. French officials have also contacted the State Department and Treasury Department, the newspaper reported.
Bank of France Governor Christian Noyer, during a trip to the U.S. last week, told Manhattan district attorney Cyrus Vance Jr. that the BNP case could have dire consequences for the bank and for the global economy, the Times reported, citing unidentified people.
The central bank governor said on May 23 that U.S. jurisprudence on such matters has changed in recent years and that BNP has complied with all European and French laws.
“We have verified that all transactions conformed with European and French laws and rules,” he said.
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