Deutsche Bank Bnp Agreement
Deutsche Bank and BNP Paribas, two of the biggest banks in Europe, have reached an agreement to settle a legal dispute over a $1.1 billion loan to a Mozambique state-owned company. This agreement comes after years of legal battles, and both banks have agreed to pay a fine of $77 million.
The dispute began after Mozambique`s state-owned company, Proindicus, borrowed $850 million from the two banks in 2013 to fund a maritime project. However, the project was a cover-up for an illegal scheme to buy military equipment, which was not disclosed to the lenders at the time of the loan agreement.
The scheme was uncovered in 2016, leading to investigations by US and UK authorities, and both Deutsche Bank and BNP Paribas ended up facing charges of violating US anti-corruption laws. The banks were accused of not performing due diligence on the loan, which would have uncovered the illegal activity.
After years of legal wrangling, the two banks have now agreed to pay the fine to settle the dispute. The settlement sum is not significant compared to the initial loan amount, but it is still an important step in resolving the issue and restoring the banks` reputations.
As part of the settlement, both banks have agreed to improve their anti-corruption compliance programs and cooperate with authorities in future investigations. The settlement also includes a three-year deferred prosecution agreement, which means that neither bank will face prosecution if they abide by the terms of the agreement.
This is not the first time that Deutsche Bank has faced legal issues. In fact, the bank has been involved in a number of high-profile scandals in recent years, including accusations of money laundering and sanctions violations. However, the bank is taking steps to improve its compliance and risk management practices, including the appointment of a new CEO and increased investment in technology to monitor and detect any illegal activity.
In conclusion, the settlement between Deutsche Bank and BNP Paribas over the Proindicus loan is a positive step towards resolving the dispute and improving compliance in the banking industry. The agreement sends a strong message that banks cannot turn a blind eye to illegal activity and must take steps to prevent corruption in their lending practices.