Commerzbank to pay US$1.45b to resolve probes

Commerzbank has agreed to pay US authorities US$1.45 billion to resolve sanctions and other violations, the latest big European bank to acknowledge moving funds through the US financial system for countries like Iran and Sudan.

Prosecutors also found Germany's No2 lender did not comply with US anti-money laundering laws that require detecting and reporting suspicious transactions in a probe stemming from an accounting scandal at Japan's Olympus.

US and New York authorities agreed to defer criminal charges against the bank for three years, providing the lender abides by the terms of its agreements. No individuals were charged, but New York's banking regulator, the state Department of Financial Services, said five employees would be fired or resign as a result of the probes, including the former head of compliance for the bank's New York branch.

Commerzbank is the latest in a series of big foreign banks that have been penalised for sanctions-related violations in recent years, forfeiting some US$12 billion, according to Manhattan District Attorney Cyrus Vance, whose office initiated the probes some six years ago.

French bank BNP Paribas paid the bulk of that, forfeiting a record-breaking US$8.9 billion last year. Other banks that have reached agreements include Amsterdam-based ING, British banks Standard Chartered Lloyds TSB Bank, HSBC and Barclays, as well as Switzerland's Credit Suisse.

"We take these violations very seriously and deeply regret the actions that led to today's announcements," Commerzbank chief executive Martin Blessing said in a statement. "We have made, and will continue to make, changes to our systems, training and personnel to address the deficiencies."