UPDATE 2-France's Hollande criticises huge U.S. fines against corporate Europe

(Adds background)

By Michel Rose

Oct 12 French President Francois Hollande
on Wednesday accused the United States of abusing its power by
demanding multi-billion dollar fines from European companies,
stoking an increasingly bitter trans-Atlantic dispute.

In an interview, Hollande said the fines – most recently $14
billion against Germany’s Deutsche Bank for selling toxic
mortgage-backed securities in the United States – were one
reason why he could not support a U.S./EU free-trade deal.

“When the (European) Commission goes after Google or digital
giants which do not pay the taxes they should in Europe, America
takes offence,” the Socialist leader told L’Obs magazine six
months before presidential elections.

“And yet, they quite shamelessly demand 8 billion from BNP
or 5 billion from Deutsche Bank.”

BNP was fined in 2014 for violating U.S. sanctions against
Iran and Sudan, causing outcry in France where the French bank’s
actions were not illegal.

BERLIN TREADS MORE SOFTLY

The EU’s decision in August to order Apple to pay 13 billion
euros in back taxes to Ireland also sparked furore in the United
States, with the iPhone maker’s CEO, Tim Cook, calling the
ruling “political crap”.

But Hollande’s comment contrasted with the far more muted
reaction from Berlin. Finance Minister Wolfgang Schaeuble said
in Washington on Saturday there had been “far too much talk”
about Deutsche Bank since the fine was made public.

The German lender has said it does not expect to pay the
full $14 billion and is negotiating a final sum with Washington,
while Berlin has adopted a more discreet approach than Paris.

The bank has set aside 5.5 billion euros ($6.16 billion) to
cover all litigation cases against it.

In the interview Hollande, France’s most unpopular president
on record, stuck to a December deadline to announce if he will
run for a second term.

Certainly, a firm line on trade with the United States could
win popular approval.

The French president said Europe should adopt the same tools
to be able to sanction American companies.

Hollande’s comments come days after a French parliamentary
report criticised what it called increasingly aggressive use by
the United States of extra-territorial laws that have cost
European companies billions in fines and other settlements.

Since 2009, European banks have paid about $16 billion to
the United States over breaches of sanction regimes and European
firms have accounted for 14 of the 15 biggest penalties handed
down, the report said.

European governments should be more confrontational with the
U.S. and consider appealing to the World Trade Organisation
should a more cooperative approach failed, one of the report’s
co-authors told Reuters.

($1 = 0.8928 euros)

(Editing by Richard Lough and Ralph Boulton)

Leave a Reply