On 12 March 2015, it was announced that Commerzbank AG, a global financial institution headquartered in Frankfurt, Germany, and its U.S. branch, Commerzbank AG New York Branch (Commerz New York), have agreed to pay a total sum of USD 1.45 billion and enter into a three-year deferred prosecution agreement with the Justice Department for, inter alia, violations of the International Emergency Economic Powers Act (IEEPA), the Bank Secrecy Act (BSA). Commerzbank was charged with knowingly and willfully conspiring to commit violations of IEEPA and Commerz New York with three violations of the BSA for willfully failing to have an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent accounts, and willfully failing to file suspicious activity reports. Commerzbank also admitted that it violated New York State law by falsifying the records of New York financial institutions.
The OFAC has also levied a fine of $258.6 million, which will be satisfied by payments made to the Justice Department. In total, Commerzbank will pay $1.45 billion in penalties.
Assistant Attorney General Caldwell has stated that “Commerzbank concealed hundreds of millions of dollars in transactions prohibited by U.S. sanctions laws on behalf of Iranian and Sudanese businesses. Commerzbank committed these crimes even though managers inside the bank raised red flags about its sanctions-violating practices. Financial institutions must heed this message: banks that operate in the United States must comply with our laws, and banks that ignore the warnings of those charged with compliance will pay a very steep price.”
“Sanctions laws are designed to protect the national security of the United States and promote our foreign policy interests,” said U.S. Attorney Machen. “Commerzbank undermined the integrity of our financial system and threatened our national security by hiding the business they were doing with entities in Iran and Sudan. The bank tried to skirt our laws by hiding its illegal business with Iranian banks from its own employees in the United States. Today’s resolution demonstrates that there will be consequences when global banks try to profit from the benefits of the U.S. financial system without respecting our laws”, says Assistant Attorney General Caldwell.
The Commerzbank deferred prosecution agreement is at: http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/12/commerzbank_deferred_prosecution_agreement_1.pdf