Commerzbank Germany to Pay $1.5 Billion Fine to the U.S.

Commerzbank Germany has agreed to pay $1.45 billion in fines to the U.S. to resolve allegations of violating sanctions against Iran and other countries. U.S. officials announced on March 12 that, in addition to paying this fine, the German bank has also agreed to cooperate in investigations regarding money laundering controls. The payment of this fine will delay the U.S. Department of Justice's legal action against this major German bank. The bank has been accused of knowingly facilitating money transfers for individuals on the sanctions blacklist within the U.S. financial system, a practice that has reportedly continued since at least 2002 and 2008. Part of these transfers was conducted by concealing the amounts involved. The allegations from U.S. officials did not name any specific individuals, but it has been reported that five executives from the bank, headquartered in Frankfurt, have been dismissed, including a former senior official from its New York office. Reuters reports that Commerzbank has not yet reacted to the reports, although the German bank stated last February that it had set aside 1.4 billion euros for legal costs related to the investigations by U.S. authorities. This second-largest bank in Germany had reached a preliminary agreement with the U.S. government last December, which reportedly involved paying fines for violating sanctions against Iran and Sudan and money laundering. Prior to Commerzbank, several other European banks had agreed to pay hefty fines to defer or stop U.S. allegations regarding money laundering or circumventing sanctions against countries like Iran. BNP Paribas of France was among the banks that agreed in July of this year to pay $8.9 billion as punishment for violating U.S. sanctions against several countries, including Iran.