US Taxpayer “Bailed Out” BNP Paribas Probed By DoJ & Fed On Sudan, Iran, Libya Deals

TARP Recipient BNP Paribas got $4.9bn of bailouts from the U.S. Taxpayer – Today, as the WSJ reports we learn BNP Paribas has been funding transactions in Iran, Syria and other countries subject to U.S. Sanctions since 2002. The bank set aside $1.1 billion to settle investigations by the Department of Justice and the Federal Reserve but as the NY Times reports, investigations are playing out on multiple fronts – centering on whether the firm did "a significant amount" of business in "blacklisted" countires (and routed the deals through the US financial system).

Via WSJ,

“…an internal probe conducted over the past few years "a significant volume of transactions" between 2002 and 2009 that could be "considered impermissible under U.S. laws and regulations...” “involving entities that were doing business in U.S.-sanctioned countries, such as Iran, Cuba, Sudan and Libya during the 2002 to 2009 period.


BNP Paribas SA on Thursday became the latest bank to disclose the extent of its litigation problems in the U.S., saying it has set aside $1.1 billion against potential penalties related to transactions in countries under sanctions...


 In most cases, BNP provided dollar-denominated financing to companies, both French and non-French…


BNP is a major provider of export financing for the oil and mining industry…


The transactions didn't necessarily get routed through BNP units in the U.S. Yet, the U.S. is asserting jurisdiction simply by claiming that its currency was involved…”

Via NY Times,

The problem could worsen, as the American authorities might ultimately assess fines higher than $1.1 billion. The bank said that there had not yet been any discussions about the size or timing of any penalties, so the $1.1 billion provision essentially amounted to a guess.


“The actual amount,” the bank acknowledged, “could thus be different, possibly very different, from the amount of the provision.”


The bank, based in Paris, also acknowledged that it had “identified a significant volume of transactions that could be considered impermissible.” The final penalties would be linked to the number of illicit transfers.



The case is the latest sanctions investigation to buffet a major global bank (e.g. HSBC). Several major banks have been caught and penalized by United States authorities for violating international sanctions on financial transaction with countries like Cuba, Iran, Myanmar and Sudan.


We are sure no actual human beings were involved in these decisions and thus no actual human being will see any jail time.. .but when you can borrow (for practically free) almost $5bn from the US taxpayer (for their own good) to fund your shady dealings, then a $1 or $2 billion fine is simply "cost of doing business"…


via Zero Hedge Tyler Durden

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