Top BNP executive to go amid sanctions busting investigation

PARIS (Reuters) - BNP Paribas' Chief Operating Officer is to step down at the end of June and retire completely on Sept 30, the French bank announced on Thursday as it wrestles with U.S. authorities over a potential $10 billion fine.

New York's banking regulator had requested the departure of the long-serving COO, Georges Chodron de Courcel, as part of a settlement for alleged violations of sanctions against Iran, Sudan and other countries, a person familiar with the matter told Reuters on June 5.

BNP Paribas did not mention the investigation in its announcement. The 64-year-old's pre-retirement departure, in less than three weeks time, was at his own request and would allow him to comply with new French bank regulations on the number of directorships he can hold, the bank said. A spokeswoman for the bank said he had planned to retire this year anyway and would not comment on the U.S. proceedings.

The bank said Chodron de Courcel had "devoted his entire 42-year career to BNP and then BNP Paribas, and has made a decisive contribution to the Group?s development, and especially to the project which eventually led to the creation of the new BNP Paribas entity."

On Wednesday, a person familiar with the matter said Vivien Levy-Garboua, a senior adviser and formerly the head of compliance for the French bank, was also among people targeted by Benjamin Lawsky, superintendent of New York's Department of Financial Services. U.S. authorities are investigating whether BNP evaded U.S. sanctions between 2002 and 2009, and whether it stripped out identifying information from wire transfers so they could pass through the U.S. financial system without raising red flags.

BNP Paribas may have to pay a fine of about $10 billion and face other penalties such as being suspended from clearing clients' dollar transactions, sources close to the situation have said.

The potential impact has raised concern in French government and bank circles. President Francois Hollande raised the issues with Barack Obama last week.

On Wednesday, Bank of France Governor Christian Noyer said a dollar clearing suspension could be disruptive to the international financial system.

BNP has said publicly only that it is in discussions with U.S. authorities about "certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions".

It has set aside $1.1 billion for the fine but told shareholders it could be far higher than that. Last month it also said it had improved control processes to ensure such mistakes did not occur again.

The bank's market value has dropped by 15 percent, erasing around 11 billion euros ($15 billion) in the four months since it first announced the provision for the fine on Feb 13.

($1 = 0.7345 Euros)

(Reporting by Andrew Callus, Blaise Robinson, Alexandre Boksenbaum-Granier and Natalie Huet; Editing by Ingrid Melander and Philippa Fletcher)

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