Recent Developments in BSA/AML and Sanctions: Commerzbank AG Settles Criminal and Civil BSA/AML and Sanctions Charges with U.S. Government

Sullivan & Cromwell LLP - March 26, 2015

On March 12, 2015, Commerzbank AG (“Commerzbank”), Germany’s second largest bank, reached a multi-agency criminal and civil resolution of allegations that Commerzbank engaged in a practice of remitting “non-transparent” cross-border payments involving sanctioned clients through its New York branch and Bank Secrecy Act/anti-money laundering compliance failures.  Commerzbank entered into deferred prosecution agreements (“DPAs”) with the U.S. Department of Justice and the Manhattan District Attorney’s Office in which Commerzbank admitted to criminal violations of the International Emergency Economic Powers Act, the Bank Secrecy Act and recordkeeping provisions of the New York State Penal Law.  Commerzbank also entered into Consent Orders with the Federal Reserve Board of Governors, the Treasury Department’s Office of Foreign Assets Control and the New York State Department of Financial Services.  As a result of the settlements, Commerzbank has agreed to pay $1.45 billion in civil and criminal penalties to the agencies, undertake significant remedial measures, engage an independent compliance monitor and terminate or take other disciplinary action with respect to individuals deemed accountable for the misconduct.  The bank, however, avoided a guilty plea or an indictment, suggesting prosecutors continue to view DPAs as a tool they are willing to employ “based on the individual facts and circumstances presented by [the] case and the [company].”