INTERNATIONAL BANKS ARE well aware that there is always a risk that they will be taken to task by the authorities of one of the countries in which they operate. They also know that the risks (and rewards) are bigger in the US than anywhere else.
So it might not seem particularly unusual that French bank BNP Paribas is headed to trial in New York, on charges relating to a series of oil prepayment contracts it entered into with respect to shipments of oil from the Republic of the Congo – that is, Congo-Brazzaville, not the Democratic Republic of the Congo (Congo-Kinshasa, formerly Zaire). According to the complaint, BNP’s actions amount to a criminal conspiracy designed to prevent Congo’s creditors from being able to attach Congolese oil shipments and collect on their debts.
What is unusual – unprecedented, in fact – is that the case against BNP is being brought not by any attorney general or other state official, but by one of the private creditors that were allegedly defrauded. The creditor, Kensington International, which is controlled by high-profile distressed debt fund Elliott Associates, isn’t trying to collect on its debts – it has litigation already running against Congo in that regard.