BNP Paribas (Suisse) SA failed to to identify, limit and monitor the risks involved in making transactions with business partners in countries under US sanctions, in particular with Sudan, the Swiss financial market supervisory authority (FINMA) said following an investigation.
The announcement comes after the BNP Paribas Group announced it had agreed to pay an $8.97-billion fine to US authorities after pleading guilty to circumventing American sanctions against Cuba, Iran and Sudan.
“The (Swiss) bank exposed itself to unduly high legal and reputational risks and violated requirements for adequate organization under Swiss supervisory law,” FINMA said in a press release.
The regulator ordered the bank to hold more capital for “operational risks” and banned it from doing business with companies or individuals under European Union or US sanctions for two years.
FINMA noted that the Swiss bank had ignored and violated US sanctions against Sudan between 2002 and 2011.
Among other things, it provided a large amount of credit to finance Sudanese oil trading and allowed dollar transfers to Sudanese and Iranian clients by avoiding any references to Sudan.
FINMA found following its investigation that BNP Paribas (Suisse) made complex manoeuvres using third banks to make transactions for Sudanese clients.
It also concealed exchange transactions for clients in Sudan.
However, FINMA said it found no evidence that the bank violated Swiss sanctions.
It said it was continuing to investigate the extent to which the bank’s board of directors, management and other employees were involved in the “misconduct”.
The BNP Paribas group announced on Tuesday that it agreed to pay the massive fine in a deal with the US Department of Justice and the New York Department of Financial Services regarding the circumvention of US sanctions imposed against Cuba, Iran and Sudan.