BNP Paribas has agreed a settlement with US prosecutors following allegations of sanctions violations.
France's largest bank has agreed to pay $9 billion (£5.1 billion) to the US in what is the largest fine handed to a European bank by the North American country in history. According to figures from the Department of Justice and Securities & Exchange Commission, BNP Paribas' exceeds the $2.6 billion fine handed to Credit Suisse for tax evasion and the $1.9 billion given to HSBC for money laundering.
As part of the settlement the bank will plead guilty to breaking US sanctions against trade with Sudan, Iran and Cuba. It will also be restricted from carrying out certain transactions in US dollars for one year from the beginning of 2015. The US wants the settlement to act as a warning to other firms that any illegal activity while working with the country would not be tolerated.
Speaking at a press conference, US attorney general Eric Holder said: "Between 2004 and 2012, BNP engaged in a complex and pervasive scheme to illegally move billions through the US financial system."
BNP had been bracing itself for a substantial fine with boss Jean-Laurent Bonnafe stating in an internal memo on Sunday (June 29th) that the bank would be "punished severely". However, the head of BNP did see some positives in the transaction.
Mr Bonnafe said: "This is good news for all staff and for our clients. It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these problems, which belong to the past."
However, France's foreign minister Laurent Fabius was less positive and described the size of the fine as being "not reasonable". He added that it would suggest that there is "an extremely serious problem" within the European banking sector.
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