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Last week the European Commission announced that it’s fining five big banks for rigging the international foreign exchange (forex) market. As many as 11 world currencies—including the euro, British pound, Japanese yen and U.S. dollar—were allegedly manipulated by traders working at Barclays, the Royal Bank of Scotland (RBS), Citigroup, JPMorgan and Japan’s MUFG Bank.

Altogether, the fines come out to a whopping 1.07 billion euros ($1.2 billion).

According to the press release dated May 16, the infringements took place between December 2007 and January 2013. Traders working on behalf of the offending banks secretly shared sensitive trading information. This enabled the traders—who were direct competitors—to “make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when.”

https://www.forbes.com/sites/greatspeculations/2019/05/20/yes-gold-is-being-manipulated-but-to-what-extent/?sh=7b2186ae2865

Are economic fines often subject to trade disputes between the EU and the United States? I am wondering if there's evidence of this, and how they're settled. Are they typically settled inside trade organization such as the WTO, or are they settled outside of court? I was reading this article and was wondering if the U.S. did something in response to this, because even if it's illegal it could lead to some trade dispute between the EU and the U.S. like it happened between the U.S. and some European countries over their digital services taxes.

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  • I would assume that for all of these banks the units operating inside the EU (mostly London, which was EU at the time) were accused of failing to obey EU laws and hence fined within the EU. That some of these banks had mother companies outside the EU is irrelevant for that.
    – quarague
    Jan 19 at 8:40

2 Answers 2

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Question:

Are economic fines often subject to trade disputes between the EU and the United States?

Short Answer:

Disputes? Frankly it's brilliant. The American Taxpayer has outsourced and privatized ( at least not our government). anti trust and regulatory enforcement. I love it. I'm hoping when the EU get's done with Apple I'll be able to change the battery in my iphone with out having to pay them $100!! The only reason I can change the battery in the first place is the E.U.; I don't know any American upset about the E.U.'s fines on behalf of consumers. Hit them again!!!

Answer:

In general the E.U. and U.S. have a very close relationship economically, culturally, and militarily. The huge fines placed on U.S. companies when they break E.U laws have been eye popping. They have not had a significant impact or produced many disputes between the parties. In general I would say the US is more concerned and focused on an alternative practice in which the E.U. funds itself. That would be import tariffs.

The U.S. government has long struggled with domestic predentary monopolies, security infractions, and privacy concerts which these companies regularly commit; and has a dubious track record of addressing them. In the United States many wish the U.S. was more aggressive with these offenders and see the E.U. as doing GOD's work, for lack of a better phrase. The US tax payers who pay attention to such things realize we benefits from the E.U.'s regulatory aggressiveness.

No the U.S. and E.U. have highly integrated economies and both are the greatest investors in each other's economy.

The E.U. where fines are a primary source of revenue. unable to levy taxes on it's citizens nor it's member nations has been extremely aggressive against large predatory companies such as Intel (**$376 million fine), Google ($2.42 Billion fine), Microsoft( $794 million fine ) and ongoing Apple fines. Many of the EU's targets have been American.

European Union Budget: Revenue

The EU's sources of income include: contributions from member countries; import duties on products from outside the EU; a new contribution based on non-recycled plastic packaging waste; and fines imposed when businesses fail to comply with EU rules.

Or just in 2023

  • Meta - €1.2 billion (Ireland)
  • Meta - €390 million (Ireland)
  • TikTok - €345 million (Ireland)
  • Criteo - €40 million (France)
  • TikTok - €14.5 million (UK)
  • Axpo Italia Spa - €10 million (Italy)
  • Tim S.p.A. - €7.6 million (Italy)
  • WhatsApp - €5.5 million (Ireland)

So, From one American to the E.U. keep up the good work.

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Not necessarily. The US does this to Euro banks with some frequency and I don't remember a formal trade dispute coming out those.

(2023) Deutsch $186M

(2017) European banks face ‘disproportional’ US fines

The average amount paid by European banks is around $500m per fine - over 10 times the average that US firms pay to US regulators, Corlytics found.

(2017) U.S., EU fines on banks' misconduct to top $400 billion by 2020 - report | Reuters

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