Commerzbank fined $1.45bn over sanctions violations

Emma Haslett
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The bank is the latest in a long list of European lenders to be fined by US authorities (Source: Corbis)

Commerzbank, Germany's second-biggest lender, has been fined $1.45bn (£974m) by US authorities.

US regulators said this morning the bank was being charged for violating sanctions against Iran and Sudan, as well as for a part it played in money laundering on behalf of Olympus, the Japanese electronics giant.

The bank turned a "blind eye", the five US agencies involved in the fine said, while employees who tried to call a halt to the practices were told they were "crying wolf".

New York's Department of Financial Services (DFS) has also ordered the bank to sack four employees, including a relationship manager, two staff members in its cash management department, and a worker in the interest and currency arm. The head of compliance for anti-money laundering has already resigned.

Benjamin Lawsky, head of the DFS, said the behaviour "highlights a potential broader problem in the banking industry".

What is especially disturbing is that employees sought to alter the bank’s transaction monitoring system so that it would create fewer ‘red flag’ alerts about potential misconduct.

According to the US attorney for the southern district of New York, one Commerzbank employee wrote an email warning colleagues that "under no circumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!".

Commerzbank is the latest in a long line of European banks to be charged by the US for breaching its sanctions. In 2014, BNP Paribas paid $8.9bn for violating economic sanctions, leading to the resignation of its chairman.

The US' tough policy on sanctions violation has led to tensions between its regulators and the European banking sector.

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