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French bank admits violating sanctions

BNP to pay US $9b for working with banned nations

BNP Paribas went to elaborate lengths to deceive US authorities, said US Attorney General Eric Holder.

Alex Wong/Getty Images

BNP Paribas went to elaborate lengths to deceive US authorities, said US Attorney General Eric Holder.

WASHINGTON — France’s largest bank, BNP Paribas, pleaded guilty Monday and agreed to pay nearly $9 billion to resolve criminal allegations that it processed transactions for clients in Sudan and other blacklisted countries in violation of US trade sanctions, the Justice Department said.

After months of negotiations, the bank admitted to violating US trade sanctions by conducting currency transactions for clients in Sudan, Cuba, and Iran. The transactions were made through the bank’s New York office from at least 2004 through 2012. The United States had imposed the sanctions on the countries to block their participation in the global financial system.

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BNP entered a guilty plea in state court in New York City and is expected to do the same Tuesday in federal court, officials said.

‘‘BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks, and deceive US authorities,’’ said Attorney General Eric Holder. ‘‘These actions represent a series breach of US law.’’

The roughly $8.9 billion deal is the largest sanctions case brought by the Justice Department. The goal of such sanctions is to cut off an enemy nation’s access to banks and other sources of capital, limiting its economic growth and ability to buy weapons, food, and other items available through global trade. The sanctions generally apply to US banks and foreign banks with US operations.

As the BNP deal inched closer, French officials in recent weeks had expressed deep concern about the punishment. They lobbied for White House intervention and warned that a large penalty could affect the entire European economy and hold up a trans-Atlantic free trade agreement.

The French economy minister last week asked the Justice Department to be ‘‘fair and proportionate’’ in deciding on the potential penalty. President Francois Hollande wrote to the Obama administration in April asking for a ‘‘reasonable’’ solution. President Obama has declined to intervene in the dispute.

The US authorities pursued other big foreign banks for sanctions violations in two cases in 2012, though both matters were resolved for smaller dollar figures.

HSBC, Europe’s largest bank, agreed to a $1.9 billion settlement with US and New York authorities in connection with the transfer of billions of dollars on behalf of Iran, Cuba, Libya, Sudan, and Myanmar.

Standard Chartered paid $340 million in a settlement with New York state regulators, who accused the bank of scheming with the Iranian government to launder billions of dollars.

The bank also paid $327 million to settle US and New York charges related to currency transactions for Iranian, Sudanese, Libyan, and Burmese entities that were said to be concealed from regulators.

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