Obama deflects French pressure to intervene in BNP fine row

Obama said that decisions on any such prosecutions lay solely with the U.S. Justice Department

Obama deflects French pressure to intervene in BNP fine row

World Bulletin/News Desk

President Barack Obama dismissed on Thursday any prospect that he might intervene in the case of BNP Paribas bank, which faces a possible huge fine for U.S. sanctions busting, despite pressure from his French counterpart.

Obama, who is due to meet President Francois Hollande in Paris later in the day, said that decisions on any such prosecutions lay solely with the U.S. Justice Department.

Hollande has stepped up his defence of France's biggest listed bank, describing the possible penalty as "disproportionate", while his government has invoked wider economic concerns and linked the row to trade talks.

Sources have said U.S. authorities are seeking penalties including a fine that may top $10 billion for the alleged breach of sanctions via money transfers involving countries including Iran, Sudan and Syria.

French attempts to politicise the issue drew a cool response from Obama. "The tradition of the United States is that the president does not meddle in prosecutions," he told reporters in Brussels.

"I do not pick up the phone and tell the attorney general how to prosecute cases that have been brought. I do not push for settlements of cases that have been brought. Those are decisions that are made by an independent Department of Justice."

U.S. Secretary of State John Kerry made a similar comment on Wednesday, adding the caveat: "We obviously want whatever it is to be fair and to reflect an appropriateness to whatever it is that is alleged to have taken place."

On Wednesday Hollande told reporters after a G7 summit in Brussels that the penalties "could have economic and financial consequences across the euro zone".

Hollande has already said he will raise the issue when he meets Obama for dinner on Thursday before ceremonies marking the 70th anniversary of the World War Two D-Day landings in northern France. He also wrote to the White House on the subject in April, and has discussed it by telephone.

Hollande said he accepted that the U.S. justice system was independent but "at the same time we have a relationship between the United States and France, a partnership, and nothing should be allowed to compromise that".

French Finance Minister Michel Sapin also weighed in on Thursday, telling Le Monde newspaper: "This could affect the ongoing talks on the free-trade treaty."

Obama has made progress on reducing trade barriers between the United States and European Union a policy priority.


Concern is growing at a European level about the scale of U.S. fines such as the one BNP Paribas may face. Credit Suisse already pleaded guilty earlier this year to helping Americans evade taxes and agreed to pay $2.5 billion.

The head of the group of euro zone finance ministers, Jeroen Dijsselbloem, also criticised the size of such penalties on Thursday.

"If you look at the fines the U.S. is putting on banks, a debate that is going on as we speak, I think that would certainly create a lot of nervousness," said Dijsselbloem, who is Eurogroup president.

"Those fines are over-excessive, I think they are much too high and they are not healthy at all," he said in London.

Hollande's comments about a wider euro zone impact follow the intervention of European Banking Authority (EBA) chairman Andrea Enria on Wednesday.

Enria told Reuters the rising penalties faced by some lenders had become a concern generally for regulators, and should be factored into this year's "stress test" of banks' financial health.

"The point of conduct risks, and of the impact of these fines and penalties ... on a bank's capital position, is a concern," Enria said.

BNP has declined to comment on any details of discussions but has said it is in talks with U.S. authorities about "certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions".

The bank has set aside $1.1 billion for a fine, but told shareholders the penalty could be far higher than that. It has also said it has improved control processes to ensure such mistakes do not occur again.

Sapin also confirmed reports that BNP had fired some staff in connection with the payments. BNP also declined to comment on that subject.

Last Mod: 05 Haziran 2014, 23:05
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