Ongoing BNP Paribas dispute ‘puts US-EU trade treaty at risk’

New York’s banking regulator is pushing bank to sever ties with its chief operating officer

 

A dispute between US courts and French bank BNP Paribas over alleged sanctions busting could hurt trade treaty talks between the United States and the European Union, French foreign minister Laurent Fabius said on Friday.

US president Barack Obama has dismissed French calls to intervene to help BNP Paribas, which faces pressure to sever ties with senior executives and may need to pay penalties that could top $10 billion, sources have said.

“This treaty can only exist on the basis of reciprocity,” Mr Fabius, who dined with Mr Obama and French president Francois Hollande on Thursday, told RTL radio. “If, in the case of a European bank, they were behaving in a unilateral way, and not on the basis of reciprocity, that could have negative consequences.”

New York banking regulator Benjamin Lawsky is pushing BNP to sever ties with chief operating officer Georges Chordron de Courcel as part of a settlement with authorities, according to a person familiar with the matter.

France’s largest listed bank would also need to pay penalties that may top $10 billion, sources have said, and temporarily halt parts of its business in America. Mr Hollande has recently stepped up his defence of the lender, describing the possible penalty as “disproportionate,” while his government has invoked wider economic concerns and linked the dispute to trade talks.

US authorities are seeking the penalties for an alleged breach of sanctions via money transfers involving countries including Iran, Sudan and Syria. Authorities are also seeking a criminal conviction for the company, sources have said. Reuters