Commerzbank personnel in Germany concealed the nature of the transactions in order to evade OFAC filters at US banks, including its own branch in New York, and cause them to process wire payments that should have been rejected, blocked, or stopped for investigation. DOJ charged Commerzbank with conspiracy, while OFAC charged the bank with substantive violations. It also entered into a separate settlement with NYDFS.Ĭommerzbank is accused of stripping out information identifying clients subject to US sanctions in order to process US dollar-clearing transactions on behalf of Iranian, Sudanese, Cuban, and Burmese customers, as well as Specially Designated Nationals (SDNs), between 20. A $260 million OFAC settlement was satisfied by the other amounts paid.Ĭommerzbank entered into a three-year Deferred Prosecution Agreement (DPA) with DOJ that imposes a number of cooperation, compliance, and reporting requirements described below. The sanctions penalties consist of $342 million in criminal penalties (divided equally between DOJ and DANY) and $376 million in civil penalties (with $66 million due to the Federal Reserve and $310 million due to NYDFS). The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) also played a major role.Ĭommerzbank’s settlement amount of $1.45 billion consists of $718 million in sanctions penalties and $734 million in AML-related penalties. The civil cases were conducted by the Board of Governors of the Federal Reserve System and the New York State Department of Financial Services (NYDFS). The criminal cases were conducted by the US Department of Justice (DOJ) and the Manhattan District Attorney (DANY). This case nonetheless is part of a continuing trend of US enforcement investigating non-US banks for violating US sanctions and AML laws. Notably, the economic sanctions and AML settlements arose from separate investigations into alleged conduct. In an unrelated investigation, the authorities separately alleged that Commerzbank violated the Bank Secrecy Act (BSA) and other anti-money laundering (AML) laws by not having a sufficient compliance program to detect suspicious activities and stop high-risk transactions before they were conducted, contributing to an ongoing fraud by the Japanese entity Olympus Corporation. The authorities alleged that Commerzbank violated US sanctions laws targeting Iran, Sudan, Burma, Cuba, and other “specially designated” persons and vessels by engaging in complex conduct to overwrite and obscure information in payment messages and checks, as well as to split payments and route transactions through various accounts or special purpose vehicles so that US financial institutions would process the transactions. On March 12, 2015, Commerzbank AG, the second-largest bank in Germany, agreed to civil and criminal settlements with US federal and New York state authorities that require the bank to pay a total of $1.45 billion in penalties.