US regulators next week plan to announce a $9 billion settlement with BNP Paribas to settle charges the French bank violated American sanctions, a person familiar with the talks said.
After lengthy negotiations, the French bank, the US Department of Justice and New York state banking regulator Benjamin Lawsky have reached a broad agreement on a settlement, said the person, who spoke on the condition of anonymity.
BNP Paribas has agreed to a $9 billion penalty and to a suspension of its dollar-clearing functions, the person said. The duration of the suspension has not yet been determined.
Also unresolved is whether the bank will plead guilty to a criminal charge and whether BNP Paribas will fire top employees whom US officials have said should be forced out, the source said.
The case concerns charges BNP Paribas breached US sanctions against Iran, Sudan and Cuba between 2002 and 2009 by handling $30 billion worth of transactions with them.
Sources also confirmed that Lawsky appointed a corporate monitor within the US offices of BNP Paribas late last year to keep an eye on the bank's activities.
The monitor is Shirah Neiman, a former deputy United States attorney in Manhattan, according to a New York Times report confirmed by two sources to AFP.
Since her arrival, Neiman has demanded documents from senior bank officials and undertaken last-minute audits with no advanced warning, a source said.
New York regulators are also close to appointing a corporate monitor at Credit Suisse, which in May agreed to pay $2.6 billion and plead guilty to a charge it helped Americans evade taxes.
The likely appointee at Credit Suisse is Neil Barofsky, a former federal prosecutor who oversaw the Troubled Asset Relief Program, the federal government program launched to bail out banks amid the 2008 financial crisis, a source said.
In the case of BNP Paribas, an internal report pointed as early as 2006 to "an operational risk" for the bank, linked to a "lack of supervision" on sanctions compliance.
The internal investigation, unveiled in the Wednesday issue of the French magazine "L'Express" was carried out by the bank's general inspector's office, under the direct authority of the executive board and charged with auditing the various departments, in particular on compliance issues.
The report "increased warnings, especially about the legal risks the bank could find itself exposed to."
It highlighted dysfunctions on "unusual and remarkable transactions" and on the fact that "the measures relating to complying with the embargoes are not spelled out," the magazine said.