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UPDATE 1-Swiss regulator says investigating staff at BNP's Geneva unit
July 1, 2014 / 9:25 AM / 3 years ago

UPDATE 1-Swiss regulator says investigating staff at BNP's Geneva unit

(Adds comment from BNP’s Swiss arm)

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

Berne-based regulator FINMA honed in on how the French lender used its Geneva arm to hide dealings on behalf of Sudanese entities, including transferring U.S. dollars and providing exchange transactions and letters of credit on behalf of clients despite a U.S. embargo.

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 imposing a two-year ban on BNP’s Swiss operations conducting any business with sanctioned countries.

BNP is one of the largest foreign banks in Switzerland, with 1,700 staff and three other offices beside Geneva -- Zurich, Basel and Lugano.

Long-standing BNP Paribas executive Geoffroy Bazin took over management of the Swiss unit in December from Pascal Boris, who remains a board member.

A spokeswoman for BNP in Switzerland, Marie-Helene Hancock, said the unit would retain its licence to operate in Switzerland and not face any regulatory sanctions in Switzerland. She didn’t comment on the Swiss staffing probe.

FINMA ordered BNP’s Swiss arm to hold an undisclosed amount of additional capital to cover operational risks, following the Paris parent’s guilty plea to two criminal charges over its financial dealings with entities subject to U.S. sanctions. BNP has agreed to pay almost $9 billion to settle the investigation. (Reporting by Katharina Bart; Editing by Mark Potter and Greg Mahlich)

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