France to defend BNP Paribas, terms possible $10 billion US fine “unreasonable”
04 Jun 2014
France said it would defend the interests of its biggest bank BNP Paribas, terming a possible $10 billion-plus US fine "unreasonable" and warning it could impact transatlantic free trade talks, Reuters reported.
French ministers had until now kept away from public discussions regarding BNP negotiations, as US authorities investigated whether the lender evaded US sanctions relating primarily to Sudan, Iran and Syria between 2002 and 2009 (See: BNP Paribas may face $10-bn fine from US DoJ: report).
"If there is an error or a violation then it's normal that there is a fine, but the fine has to be proportionate and reasonable," foreign minister Laurent Fabius said on France 2 television on Tuesday. "These figures are not reasonable."
The criticism comes two days ahead of US president Barack Obama meeting president Francois Hollande in Paris, with ties between the two allies already strained over the US' handling of the Syrian crisis and the reluctance of France to cancel a deal to sell helicopter carriers to Russia.
French officials had said Hollande would bring up the BNP issue during the talks. Other possible subjects for discussion could be US conglomerate General Electric Co's bid for French group Alstom SA's energy assets, a move that prompted Hollande's government to encourage a rival approach from Germany's Siemens AG.
The Telegraph newspaper reported French foreign minister Laurent Fabius as saying that the fine would be "an extremely serious problem", and an "unfair and unilateral decision".
A penalty of that magnitude would significantly impact BNP Paribas, and possibly force it to cut dividends or raise new money. Fabius said if BNP Paribas saw its capital cut, that would mean less lending to business, notably French businesses.
Meanwhile, at a meeting last month in New York, state and federal prosecutors discussed the potential fallout from the BNP case with Edouard Fernandez-Bollo, a senior French banking regulator, people briefed on the matter who were not authorised to discuss the private talks said, The New York Times reported.
The prosecutors - Cyrus Vance Jr, the Manhattan district attorney, Preet Bharara, the US attorney in Manhattan; and David O'Neil, then the head of the justice department's criminal division were not favourably disposed towards the overtures.