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BNP Paribas agrees to pay record US$8.9 billion fine

How BNP Paribas’ CEO told staff about their record $8.9 billion fine

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Leading French bank BNP Paribas has been slapped with a record $US8.9 billion fine by US authorities for breaking sanctions against pariah regimes.

The bank pleaded guilty to the criminal charges and agreed to the fine in order to avoid going to court for organising ways to enable Iran, Cuba, Sudan and Myanmar to get round sanctions.

Regulators have also banned BNP for a year from conducting certain US dollar transactions, which is a critical part of the bank’s global business.

In a memo to staff, obtained by Reuters, BNP Paribas CEO Jean-Laurent Bonnafe said the fines are “good news” for the bank as it will help them to “remove current uncertainties”.

“I want to say it clearly here: we will receive a heavy penalty,” Bonnafe said in an internal message on June 27, Reuters reported. “However, the difficulties that we are currently experiencing must not affect our plans for the future.”

“This is good news for all staff and for our clients,” Bonnafe says. “It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these occurrences, which belong to the past.”

According to the Wall Street Journal, Attorney General Eric Holder said the bank went to “really elaborate lengths” to conceal the prohibited transactions and deceive US authorities.

Putting profits above the law, BNP Paribas set up “satellite banks” which allowed the illegal transactions to take place, reported WSJ about the government complaint.

Additionally, it said the bank intentionally kept its New York employees in the dark about the transactions. But according to a document filed by the New York Departments of Financial Services, a state regulator, some employees understood that these sorts of practices were widespread among foreign banks.

However, it doesn’t appear the bank is too worried about the fines. On Tuesday, it said it had “ample” resources to pay the fine and shares in the bank rose, however Bonnafe did apologise to analysts and investors on a conference call this week, Reuters said.

“We deeply regret the past misconduct that led to this settlement,” Bonnafe said.

Bonnafe also yesterday published a message to banking clients on the BNP website, in which he apologised.

“We have obviously learned lessons from these failings, which are contrary to our values and to our commitment to responsible banking. We have significantly strengthened our internal controls and processes, and have taken the necessary disciplinary measures,” he said. 

“These decisions were implemented in order to avoid the recurrence of such problems. You can count on me to oversee this personally.”

Image: Shutterstock

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