Deutsche Bank fines for breaking sanctions total over $250 million

Deutsche Bank is to pay $258 million to settle with US authorities that it breached US regulatory sanctions by processing transactions in Iran, Libya, Syria, Myanmar and The Sudan.

The bank will pay $200 million to the New York State Department of Financial Services (NYDFS) and $58 million to the Federal Reserve. Several employees at the bank involved in the misconduct no longer work at the bank although Deutsche Bank confirmed said it will exit an additional six employees who were party to the scheme. It added it would ban three other employees from any duties involving the firm’s US operations.

An NYDFS statement highlighted Deutsche Bank’s relationship managers and other employees worked with sanctioned customers to conceal details about their payments from US correspondents. “During site visits, in emails, and during phone calls, clients were instructed to include special notes or code words in their payment messages that would trigger special handling by the bank before the payment was sent to the US,” read the NYDFS statement.

A number of banks have found themselves paying substantial settlements to US authorities for sanctions violations. In September 2015, Credit Agricole paid $787 million while Commerzbank paid $1.45 billion in March 2015 to settle claims of money laundering and sanctions breaches. BNP Paribas paid $8.9 billion in what was the largest penalty issued by US authorities after it processed transactions in sanctioned countries including Iran, Cuba and The Sudan. Other banks including Barclays, Credit Suisse, HSBC, ING and Standard Chartered have all been subject to fines for sanctions breaches.

Firms have also been advised to take note of developments in the UK, which is introducing its own Office of Financial Sanctions Implementation in early 2016. This could result in further enforcement cases for sanctions violations.