LONDON: French bank BNP Paribas, which is facing a potential $10bn fine for breaking US sanctions, has handed over to US investigators files covering many years of its dealings with leading companies in the oil market.
A dozen former BNP insiders and senior trading executives said it had in recent months handed over a host of documents relating to its oil dealings with Sudan and Iran, including details on trading houses’ and oil majors’ involvement in the trades.
Before now, all that had been known about the probe was that US authorities were investigating whether BNP evaded sanctions relating to Sudan, Iran and Cuba and if it stripped identifying information from related dollar wire transfers to be cleared by the US financial system.
BNP declined to comment. It has said publicly only that it is in discussions with US authorities about “certain US dollar payments involving countries, persons and entities that could have been subject to economic sanctions”.
The sources said that the probe has so far mostly focused on the bank’s dollar financing of oil trade out of Sudan — a much smaller producer than Iran — between 2002 and 2009, long after Washington imposed sanctions against the government in Khartoum in 1997 over human rights violations. It extended the sanctions in 2007.
They said BNP provided the lion’s share of trade financing to Chinese companies including Sinopec and CNPC, which were the main importers of Sudanese crude during the period. The Chinese companies declined to comment.
Sudan’s oil production rose from around 200,000 barrels per day (bpd) in 2000 to a peak of almost 500,000bpd in 2010, according to US Energy Information Administration data.
Although China was and remains the main importer of crude from Sudan, BNP also provided trade finance to major global trading houses such as Trafigura and Vitol, which were also involved in trading Sudanese oil at the time.
The trading houses declined to comment.
Several of the sources said they believed the files did not contain compromising information against the trading houses and oil companies. It was not clear if BNP provided the materials voluntarily.
The US Department of Justice (DoJ) and the Manhattan District Attorney declined to comment. “BNP has given all its files to the US authorities. The full Monty,” a former BNP Paribas insider said.
“The information that it has provided certainly includes all counterparties,” a senior trading source said.
According to people familiar with the matter, US authorities at one point suggested that BNP pay a penalty as high as $16bn, though more recently they have been discussing $10bn, which would still almost wipe out BNP’s entire 2013 pretax income.
France’s finance minister said on Sunday that talks about the fine between the bank and US authorities had progressed towards a “more equitable” level.
The bank also faces the risk of being temporarily blocked from clearing US dollar transactions.
BNP and other non-US-listed banks continued to finance oil trades in US dollars out of Sudan following the imposition of US sanctions in 1997, in the belief they were not violating those restrictions.
Reuters
