Sanctions violations cost Deutsche Bank $258M fine
Transactions valued at almost $11B processed for Iran, Syria, others
German banking giant Deutsche Bank will pay $258 million and terminate six employees for processing transactions that benefited Iran and other blacklisted nations, state and federal regulators said Wednesday.
The Federal Reserve and New York State Department of Financial Services imposed the penalties after finding that Deutsche Bank’s Manhattan-based division handled U.S. dollar transactions valued at more than $10.86 billion for Iranian, Libyan, Syrian, Burmese and Sudanese financial institutions and other entities.
The transactions, processed from at least 1999 through 2006, were forbidden based on U.S. sanctions imposed over findings of terrorism or other potential threats to the U.S.
Emails uncovered by investigators showed bank employees and customers knew the transactions were improper. One said “Let’s also keep this email strictly on a ‘need-know’ basis, no need to spread the news ...”
Separately, a bank training manual warned, “Special attention has to be given to orders in which countries/institutes with embargos are involved. Banks under embargo of the US (e.g., Iranian banks) must not be displayed in any order to (Deutsche Bank New York) or any other bank with American origin as the danger exists that the amount will be frozen in the USA.”
Similarly, clients in Iran cautioned that “No Iranian names to be mentioned when making payment to New York,” in messages to Deutsche Bank.
The settlement, which includes appointment of an independent monitor, came nearly a week after the bank announced plans to cut 35,000 jobs, close operations in several countries and make other changes in a bid to reverse declining profits and address the bank’s regulatory missteps.
The agreement also marks the latest in a string of settlements by major banks accused of violating U.S. sanctions in order to maintain lucrative business with blacklisted nations.
France’s Credit Agricole agreed to a $787.3 million penalty last month for similar violations. French banking giant BNP Paribas last year agreed to pay nearly $9 billion and plead guilty to criminal charges in a record sanctions settlement.
Despite Wednesday’s Deutsche Bank outcome, federal and city prosecutors in New York City are continuing criminal investigations of the bank’s conduct, The
New York Times reported. “We are committed to investigating and pursuing sanctions violations and money laundering at financial institutions,” said Anthony Albanese, acting superintendent of the New York regulator. “We are pleased that Deutsche Bank worked with us to resolve this matter and take action against individual employees who engaged in misconduct.”
Deutsche Bank said it ended the outlawed transactions several years ago and terminated all business dealings with the countries and financial entities involved.
The New York regulator will receive $200 million from Deutsche Bank, and the Federal Reserve will collect $58 million.
“We are committed to investigating and pursuing sanctions violations and money laundering at financial institutions.” Anthony Albanese, acting superintendent at New York State Department of Financial Services