Putin says US blackmailed France over warship with fine

By HENRY MEYER, STEPAN KRAVCHENKO AND ANTON DOROSHEV | Bloomberg News | Published: July 1, 2014

MOSCOW — President Vladimir Putin accused the U.S. of seeking to blackmail France into scrapping a contract to sell Mistral warships to Russia by offering to cut a record $8.97 billion fine against BNP Paribas.

"We know about the pressure which our U.S. partners are applying on France not to supply the Mistrals to Russia," Putin told Russian diplomats in Moscow Tuesday. "And we even know they hinted that if the French don't deliver the Mistrals, they would quietly get rid of the sanctions against the bank, or at least minimize them," he said without naming BNP Paribas.

"What is that if not blackmail?" Putin said.

With the European Union considering expanding sanctions against Russia, Ukraine ended a 10-day cease-fire Monday, rejecting pressure from Putin to extend it. Ukraine has renewed an offensive against fighters in the east that its U.S. and EU allies say are backed by Russia. Putin has blamed the crisis on foreign interference, after failing to halt closer integration between Ukraine and the EU.

French President Francois Hollande has defied U.S. criticism and refused to cancel a contract to sell two Mistral- class helicopter carriers to Russia. Hollande, who took part in talks Monday with Ukrainian President Petro Poroshenko, German Chancellor Angela Merkel and Putin, had supported an extension of the cease-fire.

Putin has "no evidence" to support his claims, which appear aimed at his domestic audience as well as public opinion in Europe, said Dmitry Oreshkin, an independent political analyst in Moscow.

"A responsible political leader wouldn't usually allow himself to say something like this," Oreshkin said by phone. "But Putin knows that the French aren't particularly well- disposed toward the U.S. right now and he is trying to exploit that."

Hollande's office didn't immediately reply to a phone message requesting comment.

BNP, France's largest bank, agreed to plead guilty in court documents Monday to processing almost $9 billion in banned transactions involving Sudan, Iran and Cuba from 2004 to 2012. The company will be temporarily barred from handling some U.S. dollar transactions.

President Barack Obama, who rebuffed Hollande's plea to intervene in the BNP affair, earlier this month criticized France for "continuing significant defense deals with Russia at a time when they have violated basic international law and the territorial integrity and sovereignty of their neighbors."

Russia annexed Ukraine's Crimea peninsula in March after the overthrow of Kremlin-backed President Viktor Yanukovych. The U.S. and the EU responded by imposing sanctions on Russia and have widened them to punish Putin for Russia's alleged role in the unrest in eastern Ukraine.

Four hundred Russian sailors arrived in France Tuesday to train on the two warships the French government is selling to the Russian navy, under a contract that Le Monde newspaper has reported is worth 1.2 billion euros ($1.6 billion). There is an option for another two ships to be built in Russia by state-run OAO United Shipbuilding Corp.

Russian President Vladimir Putin waves during a men's hockey game at Bolshoy Ice Dome during the Winter Olympics in Sochi, Russia, Saturday, Feb. 15, 2014.


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