BNP faces US$10b sanctions settlement, source says

United States authorities are seeking more than US$10 billion from BNP Paribas to settle federal and state investigations into the lender's dealings with sanctioned countries including Sudan and Iran, a source said.

A final deal was probably weeks away, the source said. The amount to settle has escalated: the bank said in April that it might need to pay far more than the US$1.1 billion it had already set aside for the case.

Prosecutors are also pressuring BNP to plead guilty to moving funds for clients in violation of sanctions against Sudan, Iran and Cuba, sources said. The settlement could be the largest criminal penalty in the US, eclipsing BP's US$4 billion deal with the government last year.

Jean Pierre Lambert, an analyst at Keefe, Bruyette & Woods, said in a report he expected BNP to pay a fine of about US$7 billion to avoid being excluded from the US dollar payment system.

Negotiations are being handled by Leslie Caldwell, head of the Department of Justice criminal division, Manhattan US Attorney Preet Bharara and Manhattan District Attorney Cyrus Vance Jnr. Benjamin Lawsky, superintendent of New York's Department of Financial Services, is also involved in the discussions, along with the Federal Reserve and the Department of the Treasury's Office of Foreign Assets Control.

Spokesmen for BNP, the justice department, the Fed, the treasury, Lawsky, and Vance declined to comment.