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U.S. Fines Deutsche Bank $258 Million for Violating Sanctions

  • Mike Eckel

German-banking giant Deutsche Bank will pay nearly $260 million in penalties to U.S. regulators for billions of dollars in transactions made for Iranian, Libyan, Syrian, and other entities in violation of U.S. sanctions.

The November 4 announcement by the Federal Reserve Board and the New York State Department of Financial Services was the latest sign of trouble for the bank, Germany’s largest.

"The firm did not have sufficient policies and procedures to ensure that activities conducted at its offices outside of the United States complied with U.S. sanctions laws," said the Federal Reserve Board, which is the regulator of all banks in the United States.

Тhe Federal Reserve will receive $58 million, while the New York State Department of Financial Services, which has oversight of financial institutions with offices in New York City, will receive $200 million.

According to the New York regulator, Deutsche Bank used "non-transparent" methods and practices between 1999 and 2006 to conduct more than 27,000 transactions valued at nearly $11 billion.

In addition to entities from Iran, Libya and Syria, entities from Burma and Sudan were also involved, all in violation of U.S. economic sanctions.

Last week, the Financial Times reported that Deutsche Bank was also facing an expanded money-laundering investigation by U.S. authorities into its activities in Russia amid other possible sanctions violations.

The newspaper said the investigation was one of the first known of a Wall Street company that has been tied to the sanctions which were imposed on Russia following Moscow's annexation of Ukraine's Crimea peninsula in 2014.

The paper said investigators were focusing on $65 billion worth of so-called mirror trades, in which Russian clients bought securities in Russian rubles through Deutsche Bank's Moscow office and then sold identical ones for foreign currency, including U.S. dollars, through the bank's London office.

U.S. officials have not commented on the report.

Deutsche Bank was fined a record $2.5 billion in May for its involvement in rigging interest rates.

With reporting by Reuters and Financial Times Of London