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France: BNP Paribas row ’puts EU-US trade pact at risk’

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BBC | 6 June 2014

France: BNP Paribas row ’puts EU-US trade pact at risk’

French Foreign Minister Laurent Fabius has said the reported $10bn (£6bn; 7.3bn euros) US fine being faced by banking giant BNP Paribas could hurt EU-US trade treaty talks.

Mr Fabius said the treaty had to be based on "reciprocity".

Media reports have suggested BNP Paribas is negotiating with US authorities over allegations of broken trade sanctions.

US President Barack Obama has dismissed French calls to intervene in the row.

According to media reports, BNP Paribas is alleged to have broken US trade sanctions against Sudan, Iran and Cuba.

Mr Fabius told RTL radio that negotiations over the Trans-Atlantic Trade and Investment Partnership (TTIP) could be hurt by the issue.

"This treaty can only exist on the basis of reciprocity," Mr Fabius told RTL radio. "If, in the case of a European bank, they were behaving in a unilateral way, and not on the basis of reciprocity, that could have negative consequences."

The EU and the US restarted transatlantic trade talks in May.

His warning comes during a visit by Mr Obama to Europe, where the US president held bilateral talks with his French counterpart, Francois Hollande.

On Thursday, Mr Obama dismissed any prospect that he might intervene to help BNP Paribas.

"The tradition of the United States is that the president does not meddle in prosecutions," he said.

"I do not pick up the phone and tell the attorney general how to prosecute cases that have been brought. I do not push for settlements of cases that have been brought. Those are decisions that are made by an independent Department of Justice."

France has been pressing the US over the size of the fine, which could almost wipe out BNP’s entire 2013 pre-tax income of about 8.2bn euros (£6.7bn, $11.2bn).

Mr Fabius has previously said a fine of the size suggested would be "an extremely serious problem", an "unfair and unilateral decision" and "not reasonable".

In April, BNP Paribas said it had set aside $1.1bn to cover the cost of US penalties, but that the "amount of the fines could be far in excess of the amount of the provision".

 source: BBC