This exceptional situation raises several questions:
The first question relates to the jurisdiction which is subject to the BNP, as did the other French banks, like all non-US banks worldwide. This is a question of territorial and legal jurisdiction of U.S. law. With what right? How the American justice system recognize the actions of a moral legal entity, a commercial and finance company operating under French and European law?
Part of the answer lies in the nature of the offending companies, subsidiaries of the BNP operating on the territory of the United States.
But this response is insufficient.
The second part of the answer lies in the currency in which the operations are performed, the dollar is still the world's reserve currency. But in this case, we can consider that each country has vocation and / or legitimacy to act globally in transactions that take place anywhere, will trade in its own currency?
The third part of the answer lies in the nature of the interests considered strategic by the United States. In other words, everything that may directly or indirectly threaten the security of the United States must be controlled and prevented if necessary. If taken too late, and after commission of what is considered a failure or a fault, then a penalty is warranted.
The most famous law in this area is one that has been issued by Congress on 26 October 2001, in response to the events of 11 September 2001, the Patriot Act. Intended to protect the United States from any illegitimate financial transactions, money laundering and cash, the Patriot Act is to regulate and control financial transactions with U.S., as well as international implications and impact on the United States in order to restrict access sources and transferring channels of funding by terrorist groups.
There were already comparable U.S. provisions from the Cold War, which restricted exports of sensitive technology to the USSR, which included the allies of the United States. They have been transformed into export restrictions sensitive to Chinese technologies.
The fourth question is: With what right does the United States allow themselves to enact global legislation, where laws passed by only Americans can and do have an effect on the rest of the world? The series of laws Foreign Account Tax Compliance Act, or FATCA, 2010 is an example. It provides a pragmatic answer: it’s just the way it is! We will come back to this later.
The Romans said that the perfect laws or pefectae leges, laws are enforced by sanctions. In other words, if there is no sanction applied and nobody respects the law. This is what leads to the fifth question: what are the ways to pressure and sanction of the United States against foreign banks and financial institutions, non-U.S. companies?
This major penalty, this bottleneck is the denial of access to Wall Street, which remains the dominant financial market in the world and the potential driving ban transactions in dollars, which is the major currency in international trade and of world reserves.
If a bank is banned access to Wall Street and / or effect transactions in dollars, it's not considered a bank.
This means that U.S. federal authorities have the power to validate and invalidate any bank in the world; and this power they wield discretion.
It's not exactly The Prince’s Act, but it’s close.
Faced with such an exorbitant power of the common law, what strategy should be adopted?
The U.S. banks, as powerful as they are, go in the direction of the current.
Like them, we must consider the psychology and sociology of American business and finance, enough to know the right federal administrative procedures and key states in this area, New York, Delaware, and finally engage in direct negotiations using what we observe.
The last thing to do is to face head-on the federal government, we must persevere in negotiations.
As Americans often say is explicit and should be considered here: if you cannot beat them, join them.
Olivier Chazoule
