BNP Paribas fined £5.2 billion for breaching trade sanctions

France’s biggest bank, BNP Paribas, has been fined £5.2 billion ($8.97 billion) for breaching US trade sanctions against Cuba, Iran and Sudan between 2004 and 2012. It is also being prevented from clearing certain transactions in US dollars for one year from the beginning of 2015. BNP Paribas agreed to pay the fine to settle the charges against them after months of negotiations with US authorities. The fine is the largest for such a case in US history.

Previously, the largest fine levied against a bank by US regulators for sanctions violations was $1.9 billion paid by HSBC in 2012.

US Attorney-General, Eric Holder, stated at a press conference that BNP Paribas had gone to ‘elaborate lengths to conceal prohibited transactions, cover its tracks and deceive US authorities’. According to Mr Holder, the bank ‘deliberately and repeatedly violated longstanding US sanctions’.

Jean-Laurent Bonnafe, CEO of BNP Paribas, said, ‘We deeply regret the past misconduct that led to this settlement. The failures that have come to light in the course of this investigation run contrary to the principles on which BNP Paribas has always sought to operate. We have announced today a comprehensive plan to strengthen our internal controls and processes…Having this matter resolved is an important step forward for us. Apart from the impact of the fine, BNP Paribas will once again post solid results this quarter and we want to thank our clients, employees, shareholders and investors for their support throughout this difficult time’.

France’s banking supervisory authority, APCR, said in a statement that it had previously examined the liquidity and solvency of the bank and found it to be ‘quite solid’ and able to ‘absorb the anticipated consequences’.

Following the US authorities’ fine, Swiss regulator, FINMA, has announced that it has now closed its investigation into the activities of BNP Paribas. In a statement released in January 2014, FINMA said it believed that the bank had ‘persistently and seriously violated its duty to identify, limit and monitor the inherent risks, subsequently breaching supervisory provisions’.