Swiss regulator probing management, staff at BNP Geneva unit

ZURICH, July 1 Tue Jul 1, 2014 4:08am EDT

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ZURICH, July 1 (Reuters) - Switzerland's financial regulator said on Tuesday it was investigating staff at BNP Paribas' Swiss arm after the French bank admitted violating U.S. sanctions against Sudan, Cuba and Iran, in part by using Geneva to conceal wrong-doing.

Berne-based regulator FINMA said the French lender used its Geneva arm to hide the fact it was transferring U.S. dollars and providing exchange transactions and letters of credit on behalf of clients in countries embargoed by the United States.

FINMA said BNP's Geneva arm "seriously violated its duty to identify, limit and monitor the risks involved in making transactions with business partners in countries under U.S. sanctions," exposing itself to unduly high legal and reputational risks, and violating Swiss banking law.

"It (FINMA) will also continue probing the extent to which the board of directors, management and other BNP Suisse employees were involved in the misconduct," the Swiss regulator said in a statement, in which it also imposed a two-year ban on BNP's Swiss operations to conduct any business with sanctioned countries.

FINMA ordered BNP's Swiss arm to hold an undisclosed amount of additional capital to cover operational risks.

A spokeswoman for BNP in Switzerland, Marie-Helene Hancock, was not immediately available for comment.

The enforcement proceedings represent a tougher sentence than one imposed on Credit Suisse last month, after the Zurich-based lender became the largest bank in decades to plead guilty to a U.S. criminal charge and agreed to pay more than $2.5 billion in penalties for helping Americans evade taxes. (Reporting by Katharina Bart; Editing by Mark Potter)

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