July 29, 2014
Cuba slams US$9B US fine for French bank
HAVANA — Havana yesterday protested US penalties levied against France’s largest bank over allegations it processed financial transactions for Cuba and other blacklisted states in violation of US trade sanctions.
In a statement published by Cuban official media, the Foreign Ministry said the penalties “violate the rules of international law and qualify as an extraterritorial and illegal application of American legislation against a foreign entity.”
The US Justice Department announced Monday that BNP Paribas had agreed to pay nearly US$9 billion to settle the case. Under the deal, the Paris-based bank entered a guilty plea in a New York Court and acknowledged processing billions of dollars in transactions for clients in Cuba, Sudan and Iran.
Cuba accuses the US president Barack Obama of “surpassing all of his predecessors” for accumulating penalties against dozens of entities worth about US$11 billion.
According to the Foreign Ministry statement released yesterday, this particular fine is the “highest fine imposed by the United States for violating the blockade on Cuba”.
US prosecutors said the transactions were handled by BNP’s New York branch office from at least 2004 through 2012.
“Sanctions are a key tool in protecting US national security interests, but they only work if they are strictly enforced,” Attorney General Eric Holder said earlier this week. “If sanctions are to have teeth, violations must be strictly punished.”
But the Cuban Foreign Ministry questioned the legitimacy of Washington’s 52-year-old embargo, which aims to isolate Communist-run Cuba economically and financially, and alluded to the annual, near-unanimous UN General Assembly votes calling for an end to what Havana refers to as a “blockade.”
“Once again, the US government ignores the overwhelming international rejection of this criminal and failed policy against our nation,” the statement said. “With actions like this, it also ignores the increasing calls from different sectors of American society in favour of a fundamental change in policy toward Cuba.” With respect to the financial repercussion this settlement could have on BNP Paribas, the bank said it won’t disrupt its dividend or growth plans. France’s biggest bank remains committed to increasing sales by at least 10 percent by 2016, Chief Executive Officer Jean-Laurent Bonnafe said Tuesday. To do that, it’s relying on North America to grow about twice that fast and generate at least US$1 billion in increased revenue.
That could be difficult as in the US, “they were not that competitive before, and the business expectations are even worse after the penalty,” said Lutz Roehmeyer, who oversees US$1.1 billion at LBB Invest in Berlin, including BNP shares. “The financial damage is high, but the reputation has been hit more than the balance sheet.”
“It’s hard to think it can be business as usual,” said Piers Brown, an analyst at Macquarie Bank in London. The growth plan “isn’t as straightforward as it sounds and some elements are being undermined.”
US authorities have targeted several banks in recent years for similar cases involving trade sanctions against Cuba and other nations.
In December 2012, Havana objected to a US$1.9 billion fine against London-based HSBC, Europe’s largest bank, and an US$8.6 million settlement with Japan’s Bank of Tokyo-Mitsubishi UFJ.
Herald with AP, Télam, Bloomberg