BNP Paribas is going to get a mighty big fine. The street estimates are in the range of 5 to 10 billion dollars. The bankers are riled up about unfair treatment and are haranguing François Hollande to intervene with the US President. That does not work so well in the US and in fact could get the US President, if he chose to interfere, charged with interference in a criminal case.
BNP Paribas is a fine bank with a rich and storied history in both the development for France but also of the EU. The problem was they knowingly did business with Cuba, Sudan, and Iran – in violation of US and international sanctions. BNP Paribas deliberately stripped information from wires for years allowing over 30 billion dollars to move to and for the enemies of the west. This was a deliberate act by some of BNP Paribas’s employees and the US is also rightly demanding their termination.
If you had not noticed the AML fines and some have been significant – but the OFAC fines are as a percentage of the non-compliance issue larger and swifter. Why this – simple- OFAC is at war by sanctions and you do not deal with the enemy. This is not mere sanctions for failure to report – this is active and substantial support of an enemy.
The EU is up in arms about what this will do to transatlantic business. They are wobbling on about the long arm of the US law and how we choose to enforce it even outside the US. Yes, there is a long arm of the US law but BNP Paribas has offices in the US – so it is not an extraterritorial reach. Will this have a chilling effect on transatlantic business – it just might, but the laws have been clear, published, and agreed to by international treaty to stop terrorism and those who export terrorism. You might have noticed it has been getting worse recently
Maybe if this were just tax avoidance and France was not getting their tax revenue they might be upset, but this was active support and material support to an enemy of the west.
With a 5-10 Billion fine – So BNP does not have a profitable year, too stinking bad. It would go much further in the eye of the US and Europe if the fine was lowered and the people who took these actions at BNP Paribas went go to jail. Not so much falling on a sword but be chucked to law enforcement where they should be sent. What has occurred is very serious and it is being taken very seriously.