Over the weekend, the French finance minister said that BNP was the last French bank to be targeted by the U.S. – one assume he means at least for now – and that it’s now the turn of banks from elsewhere in the EU to take their turn in the dock. In our assessment last week of the various enforcement actions in this case, we advised not only that future enforcement actions are in the works, but also that penalties may well be higher given the general view that – criminal sanctions against BNP notwithstanding – big banks are still getting away essentially scot-free. We also noted that we expect near-term criminal actions against U.S. banks to reinforce the U.S. stand that nothing done to BNP is in any way discriminatory because of its non-U.S. status. Later in the week, a criminal sanction was finalized against SunTrust. While this was a relatively small case and generally flew below public notice, it’s still confirmation that the current climate for legal and reputational risk is, if anything, even more challenging than at any time since the financial crisis began.
Karen Petrou’s memo last week also focused on the BNP case. She analyzed the little-noticed aspects of the FRB’s action against the French bank. This, she argued, puts foreign banks on notice that, for purposes of AML and sanctions compliance, dollar-based activities are now effectively subject to U.S. law no matter where they occur.
If you have any questions or need more information, please send an email to email@example.com or call 202.589.0880. We can also schedule a call with Karen Petrou to discuss these issues.