Arab Today, arab today bnp tax evasion us still dictates its economic law
Last Updated : GMT 06:23:23
Arab Today, arab today
Arab Today, arab today

BNP, tax evasion: US still dictates its economic law

Arab Today, arab today

Arab Today, arab today BNP, tax evasion: US still dictates its economic law

French bank BNP Paribas
Washington - AFP

Although its diplomatic clout is compromised on several fronts, the United States still dictates its economic law around the globe and has even expanded its reach, at the risk of raising hackles.
The case of BNP Paribas is the most spectacular evidence of the trend.
After lengthy negotiations, France's largest bank agreed to pay $8.9 billion and pleaded guilty to moving billions of dollars through the US financial system on behalf of Cuba, Iran, Myanmar and Sudan, all blacklisted by US economic sanctions.
The use of the dollar alone allowed US authorities the right to order a criminal guilty plea and the record penalty on a foreign bank, a source of friction with French officials.
Former French prime minister Michel Rocard railed against "abuse of power" in an op-ed article in Le Monde newspaper, accusing the US of a kind of economic "occupation" based on the extraterritoriality of its laws.
"The sanctions regulations have been enforced more and more aggressively in the past 10 years and their use has been broadened from a response to 9/11 to a larger tool of foreign policy," Farhad Alavi, a Washington-based lawyer specialized in sanctions, said in an interview.
- Unilateralism -
Another issue has eyebrows furled. Since the beginning of July, when a sweeping US law against tax evasion took effect, Washington has the right to demand the data of tens of thousands of accounts held by Americans in foreign banks.
Some 70 countries have signed treaties or agreed to cooperate with the US on the Foreign Account Tax Compliance Act (FATCA), but the tax evasion offensive has also been criticised for unilateralism.
"It's not fabulous, unilateralism," admitted Pascal Saint-Amans, a staunch supporter of FATCA who heads the unit fighting tax havens at the Organisation for Economic Cooperation and Development.
"Lex Americana" also has extended its gavel into Argentina's crucial legal battle over government debt payments.
Deciding a case linked to Argentina's debt default in 2001, a US judge recently ordered Buenos Aires to suspend payment to its creditors unless it pays up on debt held by bond-holders who refused to join others in the 2005-2010 restructuring of the country's defaulted debt.
This order, which is limited to Argentina's bonds issued in New York, could be extended to bonds issued under British law, denominated in euros and with no link to the US.
Worrying about that possibility, investment funds have asked for a clarification from the judge.
"This court should clarify that the injunctions do not apply to the foreign third parties that process payments on the euro bonds," they said in a motion to the court.
- Dollar leverage -
Across these three issues, the Americans are sending a "very clear" message, said former New York Stock Exchange vice president George Ugeux: "Don't mess with us."
According to this expert, the world's leading economic power still wields "considerable leverage" thanks to the dollar, the world's reserve currency.
Stung by the BNP Paribas affair, French authorities have called on Europe to make progress in advancing the use of the euro.
The head of French oil group Total, Christophe de Margerie, backed up that call, publicly declaring: "Nothing prevents anyone from paying for oil in euros."
The extension of "Lex Americana," which still has not reached China, could have negative consequences.
If US regulations become "overly burdensome," investors will shift financial activities to other financial markets, said Brookings Institution economist Barry Bosworth.
In the US, neither the Treasury Department nor the business community, however, appear to be worrying about an abrupt turn against the greenback.
"It's David against Goliath," said Ugeux. "There's no European consensus challenging the United States."
And, he recalled, "one must not forget that the euro was on the brink of collapsing" not so long ago as the eurozone reeled from the Greek debt crisis.

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Arab Today, arab today bnp tax evasion us still dictates its economic law Arab Today, arab today bnp tax evasion us still dictates its economic law

 



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