A relief rally that BNP Paribas has finally settled its sanctions busting case with the US government sent its shares four percent higher on Tuesday, but the financial world is waiting to see who is next.
The French bank has agreed to pay the equivalent of 6.5 billion euros to resolve accusations that it violated sanctions against Sudan, Cuba and Iran.
The size of the settlement, and the fact that BNP Paribas was banned for a year from conducting certain US dollar transactions, reflects the length of time involved – 2004 to 2012 – and that the bank ignored warnings from US officials about its obligation to crack down on illegal activity.
Chief executive Jean-Laurent Bonnafé said in a statement BNP Paribas “regrets the mistakes made in the past”.
He added: “Some of the failures that have been identified by this investigation are inconsistent with ethical principles.”
The severity of the punishment is aimed at sending a clear message to other financial institutions around the world.
Two other major French banks, Credit Agricole and Societe Generale are reportedly among those being investigated for possible money laundering or sanctions violations.
Credit Agricole and SocGen have disclosed that they are reviewing whether they violated US sanctions. SocGen said in its latest annual report that it is engaged in discussions with the Treasury Department’s Office of Foreign Assets Control over potential sanctions violations.
Germany’s Deutsche Bank, Citigroup’s Banamex unit in Mexico and some Italian lenders are also said by some sources to be in the sights of the US Justice Department.
The head of its criminal division, Leslie Caldwell, has said that a unit within the Justice Department is looking at a range of firms that were potentially involved in illicit money flows.