France is planning to enlist support of the G20 to challenge the decision by the American regulators that imposed the hefty fines on the foreign financial institutions. Last month, BNP Paribas was obliged to pay $8.9 billion to Washington. Paris is going to call for help at the November G20 meeting in Brisbane. The so-called U.S. extraterritoriality will be put on the agenda. Germany, Great Britain and Italy are supposed to get behind France on this matter, The Financial Times reports.
The French government tried to convince the U.S. authorities to ease its restrictions against BNP Paribas which has to suspend its clearing operations in dollars for a year. As previously stated, the lender pleaded guilty for breaking American sanctions against Sudan, Iran and Cuba. Paris admits that BNP Paribas actions were imprudent. But France feels indignant over the punishment and the principle the U.S. government sticks to. In a nutshell, America thinks that it has a right to have its jurisdiction over all the foreign banks making dollar transactions. The thing is that French BNP Paribas did not violate the rules set by France or the European Union as a whole.
Paris diplomats say that France’s Minister of Finance Michel Sapin has been negotiating this issue with his German and Italian counterparts trying to solicit their support. The initiative was endorsed. In the meantime, Deutsche Bank and Commerzbank might fall under Washington limitations next. But the punishment is likely to be less severe. Societe Generale and UniCiredt have been under investigation as well.
