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The New Math: Multi-agency enforcement actions against Commerzbank AG

Everyone gets a piece of the pie here – the NY Department of Financial Services gets $610 million, OFAC’s official fine is in excess of $250 million (but is deemed paid on the basis of the lesser amount paid to the Department of Justice). All told, it’s another mega-fine of $1.45 billion dollars for conduct breaching the Iran, Weapons of Mass Destruction, Sudan, Burma and Cuba sanctions programs from 2002 until 2010.

Here is how OFAC saw matters in knocking down the penalty from a base of over $574 million:

The following were found to be aggravating factors:

  • At a minimum,Commerzbank acted with reckless disregard for U.S. sanctions requirements in processingtransactions in apparent violation of OFAC sanctions regulations;
  • management at Commerzbankknew or had reason to know of the conduct leading to certain of the apparent violations;
  • theconduct described above conferred significant economic benefit to persons subject to U.S.sanctions and undermined the integrity of multiple U.S. sanctions programs;
  • Commerzbank is alarge, commercially sophisticated financial institution; and
  • Commerzbank did not maintainadequate policies or procedures to ensure compliance with the sanctions programs administeredby OFAC.

Mitigation was extended because

  • Commerzbank has not received a penalty notice orFinding of Violation from OFAC in the five years preceding the date of the earliest transactiongiving rise to the apparent violations;
  • Commerzbank cooperated with OFAC’s investigation ofthe apparent violations by engaging in an extensive internal investigation, by responding forrequests for information, and by executing a statute of limitations tolling agreement withmultiple extensions; and
  • Commerzbank took remedial action in response to the apparentviolations described above.

The NY DFS was also able to extract, in return for settling the charges, the termination of multiple employees and the installation of an independent monitor at Commerzbank.

Links:

OFAC Notice

OFAC Enforcement Action

Treasury Department Settlement

Treasury Department Press Release

NY DFS Press Release

 

Categories: Burma Sanctions Cuba Sanctions Enforcement Actions Iranian Sanctions NY DFS updates OFAC Updates Settlements Sudan Sanctions Weapons of Mass Destruction Proliferation Sanctions

eric9to5

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