French Bank BNP Paribas pleaded guilty in US court for
violating US sanctions against nations that are under an embargo by the United
States.
The French bank pleaded guilty for violating sanctions
against Sudan, Cuba and Iran, and agreed to pay $8.9 billion on concealing international
transactions denominated in US dollars. The bank is charged with helping these
countries avoid sanctions. When the decision became know the French finance
minister questioned the dollar dominance and called for a need of rebalancing
of the currencies for global payments.
Total, the French oil conglomerate with a market
capitalization of over $122 billion, said that there is
no reason that oil purchases should be denominated in dollars. Despite this,
central banks hold over 60% of their reserves in dollars. The reason being is
that of the safety provided and liquidity of the US Treasury market.
The settlement comes nowhere near the HSBC’s $1.9
billion payment for money laundering to Mexican drug cartels. BNP was accused
of setting up a network of banks so as to hide dollar denominated transactions
Last week, the US Supreme Court ordered Buenos Aires
to fully compensate creditors who rejected debt restructuring after the 2002
Argentina default. Other banks such as Germany’s Commerzbank and Deutsche Bank
are also under scrutiny.
