Sanctions probe now targets German banks
Wednesday, July 9, 2014 at 7:28AM
Julie DiMauro in Banamex USA, Barclays, Commerzbank AG, Credit Agricole, Credit Suisse, Cuba, Deutsche Bank, Iran, Royal Bank of Scotland, Societe Generale, Standard Chartered, Sudan

State and federal authorities have begun settlement talks with Commerzbank AG and Deutsche Bank over their alleged dealings with countries blacklisted by the United States.

The timing of a possible deal could cost the German banks billions in penalties is still unclear, Reuters said

Sources said Commerzbank may be accused of transferring money through its U.S. operations on behalf of companies in blacklisted Iran and Sudan. The bank could pay at least $500 million in penalties, the report said.

At the end of 2013, Commerzbank set aside nearly $1.3 billion for litigation risks, including a possible enforcement action for breach of U.S. sanctions.

Any deal with Commerzbank is expected to lead to a separate settlement with Deutsche Bank.

Last week, France's BNP Paribas pleaded guilty to two criminal charges and agreed to pay almost $9 billion to resolve accusations it violated U.S. sanctions against Sudan, Cuba and Iran.

BNP became the seventh bank to settle criminal sanctions offenses but the first to plead guilty.

Banamex USA (the U.S. arm of Citigroup Inc's Mexican unit), Credit Agricole and Societe Generale are also under investigation for possible U.S. money laundering or sanctions violations, Reuters reported last week.

Banks that have paid fines to settle U.S. charges of breaching sanctions against Cuba, Libya, Iran and Sudan include Standard CharteredBarclaysRoyal Bank of Scotland and Credit Suisse.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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