BNP Near Settlement With U.S. for Up to $9 Billion

07-26-2014 • http://online.wsj.com

(So what pissed the USG off? http://www.defenseindustrydaily.com/russia-to-order-french-mistral-lhds-05749/ - 'And we can reduce that fine if you don't deliver... blah blah blah' - Ship Info Video)

The U.S. has been investigating European banks regarding sanctions violations for more than five years and still has several cases outstanding. A penalty close to $9 billion for BNP would be the largest by far for violating U.S. sanctions.

U.S. officials contend that BNP's evasion of sanctions was far more extensive than other banks previously punished for similar conduct. Sanctions cases typically involve a bank altering records to avoid raising the suspicion of the U.S. Treasury Department's Office of Foreign Assets Control, or OFAC. Some banks and customers try to get around the "OFAC filter'' to avoid running afoul of sanctions or to prevent a transaction from being delayed while authorities give it extra scrutiny, according to people close to the investigations.

In past cases, banks have removed—or "stripped"—such red-flag information such as codes that would identify the sender or recipient of the funds as being in a sanctioned country. This process could mean leaving certain fields blank in financial forms, filling such fields with a single period or an internal code to indicate the transaction involved a bank branch somewhere else, such as London or Paris.

The BNP probe has found a different means of disguising suspicious transactions, people close to the investigation say. BNP used regional banks with their own clearing codes to route illegal transactions with Sudan, making them more difficult to detect, according to multiple people involved in the investigation.

Over the course of the past year, officials involved in the probe gradually concluded BNP's misconduct dwarfed that of previous cases, and determined to raise the amount of their penalty.