US regulators find shortcomings at New York branch of BNP Paribas

0 Comments | AFP, November, 2004

PARIS (AFP) — US banking regulators have found shortcomings in procedures used by the New York branch of French bank BNP Paribas to report suspicious movements of funds.

The Wall Street Journal said Federal Reserve concerns about the BNP were sparked by the House of Representatives International Banking Committee, which is looking into the possibility that the BNP may have overlooked fraud and corruption in the United Nations oil-for-food program in Iraq.

The bank executed letters for credit in connection with the program.

The Journal said that in one instance, the BNP is alleged to have "allowed proceeds to be diverted from the recipient named in the letter of credit to an unknown third party."

It added that the BNP agreed that such action may have...