Bloomberg reports that the US plans to fine a French bank US $10 billion:
U.S. authorities are seeking to impose the fine to settle allegations that BNP transferred funds for clients in violation of sanctions against Sudan, Iran, and Cuba, according to people familiar with the investigation. The fine could be the largest criminal penalty in the U.S., eclipsing BP Plc’s $4 billion accord with the Justice Department last year.
I have little sympathy for banksters and politicians who are essentially arguing over how they going to divide the spoils of the middle class. But this $10 billion fine of France is a particular arrogant treatment of an “ally” and has the potential of helping the anti-FATCA movement. It is an especially egregious example of how the US determines that its laws have international jurisdiction and has set about confiscating the world’s wealth through its banking hegemony. If the US keeps this up, expect the rest of the world to join Russia and China economic coalition against the US.
Hat tip, Zerohedge: France Furious At US $10 Billion BNP “Masterful Slap”, “Racketeering” Fine
Actually, this is a pretty cool idea: $10 billion is how much the United States federal government spends each and every day. So basically, if you could fine 365 banks around the world $10 billion, you have your budget for a year. This is the great thing of having the most powerful military in the world. You can force other nations to pay for your operating expenses. The Romans did it. Why not the Americans?
The US forbids Americans from vacationing in Cuba (unless you’re Beyonce and can get Obama to bless it that is). Does that mean they could sanction countries whose citizens vacation in Cuba? There’s no end to the silly games the US can play.
What about duals living in Canada who have vacationed in Cuba? Is this another way to rob the Canadian economy through multi billion dollar penalties? They could fine Visa and MasterCard for example for letting people book vacations to Cuba on their cards. I’d like to see the US try doing that. Then we’d have all kinds of Canadians on our side and potentially donating to our legal fund.
Rafael Correa should teach a master class on leadership.
http://en.wikipedia.org/wiki/Rafael_Correa
William K Black needs to go on the Wall of Shame
http://therealnews.com/t2/component/content/article/75-william-black/2091-the-wsj-suggests-hollande-may-redefine-chutzpah-by-complaining-to-obama-about-bnp-paribas–on-the-70th-anniversary-of-d-day
Who is William K Black?
http://en.wikipedia.org/wiki/William_K._Black
@omgheestillanamerican — Also, with CLN in hand you can now buy those cuban cigars legally. Nice perk.
@Tim:
Looks like Black is uniquely qualified to advise the admin as that is exactly what they are doing all day long.
Black is VERY popular on HuffingtonPost and Daily Kos
The US is reducing its military. The president said that they will be using sanctions instead. Go figure – one way to pay off your debt is to threaten then try to enforce sanctions and collect fines.
What will happen with China? don’t they hold most of the US debt?
What will happen to the stock market? Will this be the start of destabilization of the world economy?
They never could afford their military adventures. Now the whole world will be paying for everything the US bought on credit. FATCA has very little to do with catching tax evaders. If they wanted to catch homelanders hiding money in countries like Canada they would have been more cooperative about letting Canadian citizens and residents off the hook. Since very few Canadians would owe taxes to the US anyway there was no reason they couldn’t have allowed that. It would have been a win win. The US would catch their tax evaders and Canada’s citizens would be left in peace. I’ve never heard of a billionaire choosing to hide out in Canada.
The real reason for FATCA is to get foreign countries to pay off the US debt. They start with so called US persons but one way or another they will still come after the banks next. That’s where the big money is.
FATCA is really the start of a new world war. It’s a financial war because they can’t afford the conventional kind anymore and their population doesn’t have the stomach for it. It’s the US against the world. I can’t believe how stupid some of the world’s governments are that they can’t see through this.
As for destabilizing the world economy, the US doesn’t care. Their own economy is in the toilet and all the money printing they’ve done in the last 5 years hasn’t done anything to improve it. If the US knows their economy is fucked no matter what they have nothing to lose by starting a financial war. It will be the only way they have left to make money.
If the countries of the world are to survive they have to come up with a way to divorce themselves from the US. That’s a very hard realization to come to.
The US government has been gridlocked for the last 4 years or so ever since the Democrats lost their majority in the House. They can’t come up with a solution to the easiest of problems because all they do is fight each other.
It is a great irony that who will prove to have committed history’s greatest act of confiscating private property will not be the Nazis, the Communists, or the Socialists but rather the American capitalists.
Meanwhile the rest of the world stands by and watches or even supports this U.S. hegemony because they all are morally lazy and lacking in courage.
…What???
When I receive a US dollar wire transfer from a foreign customer (let’s say somebody in South Africa) the process goes like this:
1. First the money leaves the South African bank
2. Goes to the South African bank’s correspondent bank in New York
3. Goes to my Canadian bank’s correspondent bank in New York
4. Goes into my US dollar account at my local bank in Canada
I’m assuming all US dollar wire transfers have to be done like this but I could be wrong.
So technically when you do a US dollar wire transfer the money does end up under US jurisdiction. But if that’s the case why wouldn’t the US charge the correspondent bank in New York? I believe the correspondent bank is always a US bank. It’s the US bank that should be charged and fined for breaking US law not the foreign bank who may not be aware of US laws.
robbery
http://dealbook.nytimes.com/2014/06/02/french-officials-twist-u-s-arms-in-bank-inquiry/?_php=true&_type=blogs&hp&_r=0
Push back from the French govt.
I wonder if this helps dual EU-US citizens living in the EU.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31996R2271:EN:HTML
@ omgheestillanamerican, OFAC is incredibly complex and has an incredibly expansive scope. in general, to answer your questions, duals (including unfortunate, accidental Americans) could be fined/prosecuted for visting/spending money in Cuba; paying for a trip to Cuba to a Canadian company with Visa/MC would probably not incur a fine; using the card in Cuba if the transaction is processed in USD or through US clearing would (and I cannot imagine either company allowing that to happen). It will be interesting to here more details about the BnP case; from what is in the press, it appears they did business with Sudan using foreign entities, but then cleared the transaction via the US (which has long been a pretty big no-no in the OFAC world). For a bank linke BnP that could have easily cleared everything in EURO, would be interesting to know why they didn’t do that.
And one more thing: technically speaking, under OFAC, a US person cannot transact with a Cuban National outside the United States, so a Canadian company owned by a dual national that sells something to a Cuban living in Canada could technically fall afoul of the rules.
@uscitizenshipnightmare, how is a dual national supposed to know if somebody living in Canada is a Cuban national? You can’t ask every customer that question. You would be sued for discrimination. What constitutes proof that somebody is not a Cuban national? Do you ask for a CLN? This is getting ridiculous.
Also how do US companies doing business over the Internet know if a Canadian customer they are shipping to is actually a Cuban national? There could be lots of Americans living in the US who are breaking US laws by selling to Cuban nationals resident in Canada.
I seems like foreign companies have become little piggy banks for the US to smash periodically when in need of spare change. Does anyone think that if Exxon-Mobil owned the Macondo well instead of BP that Exxon-Mobil would have paid $40-80 billion like BP did?
uscitizennightmare and all;
You don’t even have to be a US person to be persecuted by the US re Cuba,
See this past incident:
http://news.bbc.co.uk/2/hi/americas/1910284.stm
“The Canadian government has criticised the United States over the charges filed against Mr Sabzali, saying it was trying to impose US law outside its own borders.
Mr Sabzali is believed to be the first foreign national to be tried and found guilty of violating the act.
As he left the court, James Sabzali said he was shocked and confused by the verdict. He was found guilty on 20 charges and another count of conspiracy.
The case has caused some controversy in Canada, where the government has objected to the charges, saying that the United States was trying to enforce its laws outside its borders.
Canadian media have accused the United States of undermining Canadian sovereignty.
Before the court case started, Mr Sabzali said he was bewildered because, as a Canadian citizen, he was obliged to ignore the US embargo……….. ”
http://www.canadiannetworkoncuba.ca/Documents/Sabzali-Eckardt.shtml
“Sabzali, a former Hamilton native, is both the first Canadian and first foreign national found guilty of violating the U.S. embargo against Cuba. He was convicted of conspiracy and 20 embargo violations, eight of them while resident in Canada. The case, widely considered a challenge to Canadian sovereignty, involved the sales of water purification supplies to Cuba.” ……..” Sabzali attorney Robert Welsh asked for the continuance, in part to seek “disclosure of [Washington’s] communications with Canada,” communications which he argued may raise issues relevant to the defence. Ottawa filed two notes with the U.S. State Department following the convictions, the latter characterized as a “strong protest” by Welsh.
Washington has reportedly not responded to the notes.
Sabzali, 43, faces 205 years in prison and over US$5 million dollars in fines, although prosecutors initially sought a 41-51 month jail term. However sentencing officials recently determined that Sabazli’s later position as North American sales and marketing manager warranted a term of 53-62 months.
Sabzali has termed his case a “politically motivated.” According to Joseph D’Cruz, professor of international business at the University of Toronto’s Rotman School of Management, “American rules on [the Cuban embargo] are very strict, almost draconian.”
The Canadian Foreign Extra-territorial Measures Act requires Canadian citizens not to comply with the U.S. embargo. “…….
Funny that the Canadian media and the Canadian government were all over that case, up in arms about the breach of Canadian sovereignty, but won’t do the same to defend the RESPs and RDSPs of Canadian citizen children born here, from US taxable and penalizable status conferred merely by parentage. Or those born Canadians duals with an accidental US birthplace.
‘Edelweiss says
June 3, 2014 at 12:16 pm
I seems like foreign companies have become little piggy banks for the US to smash periodically when in need of spare change. Does anyone think that if Exxon-Mobil owned the Macondo well instead of BP that Exxon-Mobil would have paid $40-80 billion like BP did?”
“J.P. Morgan Adds $2.6 Billion to Its $25 Billion Plus Tally of Recent Settlements”
http://blogs.wsj.com/moneybeat/2014/01/07/j-p-morgan-adds-1-7-billion-to-its-25-billion-plus-tally-of-recent-settlements/
@Badger, I remember that case. If memory serves, he eventually pled guilty to one count and probation of not informing the US government that US citizens were violating OFAC (after having been initially charged with 76 counts of direct violations and 100 or so years of prison). Amazing.
An FT article comments on the USG’s efforts to extract a draconian penalty from BNP: “America prosecutes its interests and persecutes BNP”. Several relevant excerpts:
“In 2012, for instance, a Standard Chartered director was quoted addressing Americans in terms too salty to print, and asking, rhetorically: “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?””
“America is using its banking laws not to make its financial system safer, nor to protect its own citizens from predatory financial behaviour, but rather to advance foreign policy and national security objectives. Only in America, for instance, would citizens have to apply to the finance ministry in order to get a visa to visit Cuba.”
“No other country can get away with this: what we are seeing is unapologetic American exceptionalism, manifesting as extraterritorial powermongering. Using financial regulation as a vehicle for international power politics is extremely effective. It is also very cheap, compared with, say, declaring war.
US officials never apologise for the fact that their own domestic law always trumps everybody else’s; rather, they positively revel in it. The consequence is entirely predictable: a very high degree of resentment at the way in which the US throws its weight around.”
@omgheestillanamerican, et al:
The use of the Chinese renminbi to settle transactions with the US has increased significantly from 0.7% (Apr 13) to 2.4% (Apr 14) (measured in value), although this is still very small in absolute terms. With all countries, China settles 13 to 15% of transactions in RMB. HSBC thinks that it will hit 30% in 2015. (See FT article: “Renminbi use surges in home of US dollar”).
The more often that the USG uses the dollar as a weapon for its foreign policy purposes, the less it will be used for trade purposes. Russia is making efforts to increase use of its rouble for cross-border trade to move away from the USD. The Euro should also be a perfectly acceptable currency for many purposes outside of the EU, although, historically, Asia continues to prefer the USD.