* BNP seen paying $8-9 bln for sanctions breaches - source
* France has urged penalty to be fair and proportionate
(Adds more source comments, background, shares)
By Karen Freifeld and Maya Nikolaeva
NEW YORK/PARIS, June 23 French bank BNP Paribas
SA is likely to pay $8 billion to $9 billion as part
of a potential settlement with U.S. authorities over violations
of sanctions, according to a person familiar with the matter.
U.S. authorities are investigating whether BNP evaded U.S.
sanctions relating primarily to Sudan between 2002 and 2009, and
whether it stripped out identifying information from wire
transfers so they could pass through the U.S. financial system
without raising red flags, sources have said.
The size of the potential fine has been a source of tension
between France and the United States, with French President
Francois Hollande warning against a "disproportionate" penalty
that might damage France's biggest listed bank.
A big penalty could not only hit BNP's capital position and
dividend, but could weaken its attempts to expand in North
America as it strives to raise revenue and profits outside its
traditional European markets.
The U.S. investigation has turned up books and records
violations in transactions involving Sudan, Iran and Cuba, a
source familiar with the matter said on Sunday.
A BNP spokeswoman declined to comment.
French Finance Minister Michel Sapin on Monday did not
comment on a possible deal, but repeated the French position
that any penalty should be fair and proportionate.
"The French state, the government ... has played its role in
telling the Americans: 'Be careful - by all means punish the
past but don't punish the future'," he told France Info radio.
Earlier in the month, Reuters reported that U.S. authorities
negotiating with BNP at one point suggested a penalty as high as
$16 billion, although that was viewed as a negotiating tactic in
response to an offer from BNP of about $1 billion.
BNP, the biggest collector of investment-banking fees in
France according to data from Thomson Reuters and Freeman
Consulting, has been negotiating on an almost daily basis with
U.S. authorities for weeks.
The potential settlement could include BNP pleading guilty
to a criminal charge of violating the International Emergency
Economic Powers Act, another source familiar with the matter has
said. The potential settlement was first reported by the Wall
A further source close to the situation said BNP could
accept a guilty plea, but it was unclear if any charge would be
against the parent group or at a subsidiary level, such as the
Swiss unit including its Geneva commodity trading centre.
BNP was the world's top financier of commodity trading
throughout the 1990s and 2000s. However, it has drastically
reduced staffing in its Geneva and Paris offices over the past
two years as it cut some of its riskier business and studied
implications of the U.S. investigation, BNP insiders and senior
trading executives have told Reuters.
BNP's revenue targets for its trade financing business could
be missed due to the investigation, analysts at Jefferies said
in a note last week, citing the risk of it losing business.
The bank faces other penalties such as being suspended from
clearing clients' dollar transactions, sources close to the
situation have said. A source familiar with the matter said on
Monday parties were still negotiating the duration of any ban.
The U.S. investigations are being conducted by authorities
including the U.S. Justice Department, the U.S. Attorney's
office in Manhattan, the U.S. Treasury Department, the Manhattan
District Attorney's office, and the New York Department of
The New York Department of Financial Services, which
oversees certain banks in New York, would not revoke the bank's
license to operate in New York if BNP agreed to other stiff
penalties, a source has said.
The state regulator has sought the termination of more than
a dozen employees as part of the settlement, at least some of
whom have already left.
Shares in BNP were little changed at 1500 GMT.
(Additional reporting by Steve Slater in London, Supriya Kurane
in Bangalore and Mark John in Paris; Editing by Kenneth Maxwell
and Mark Potter)