Germany’s Commerzbank AG has entered into a deferred prosecution agreement with the US Department of Justice for sanctions and anti-money laundering (AML) violations.
The bank has also agreed settlements with the US Treasury Department’s Office of Foreign Assets Control (OFAC), the Board of Governors of the Federal Reserve System, the New York Department of Financial Services (DFS), and the New York County District Attorney’s Office.
Commerzbank has agreed to pay nearly US$1.45 billion, including US$718 million for alleged OFAC sanctions violations, and the remainder for alleged Bank Secrecy Act, AML and related deficiencies.
The US authorities alleged that the bank processed thousands of transactions in a manner that omitted or obscured sanctioned customers and counterparties, despite concerns and warnings from the bank’s legal and compliance departments.
The DFS settlement also required the termination of several Commerzbank employees who had “central roles” in the cited conduct.
Even though the Commerzbank’s penalties seem low compared with settlements such as BNP’s US$8.9 billion fine in 2014, recent actions should cause banks and companies active in international transactions to take notice, according to international law firm, Paul Hastings.
Settlement sizes increasing
It says that criminal and civil enforcement actions in the trade controls space are accelerating.
Meanwhile, the average size of settlements is increasing, and US federal and state regulators and law enforcement authorities are becoming increasingly aggressive in pursuing these types of cases, including asserting broad jurisdiction over non-US entities and operations according to an analysis published by the law firm.
More analysis by Paul Hastings of AML and sanctions violation settlements can be found here.
Categories: Trade Based Financial crimes News
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