New York, NY (BBN)– Germany’s second-largest bank, Commerzbank, has agreed to pay a total of $1.45bn (£980m) to US authorities for violating economic sanctions against businesses in Iran and Sudan.

The penalty also includes charges relating to money laundering carried out on behalf of Japanese firm Olympus, reports BBC.

Regulators said Commerzbank had “turned a blind eye” to illegal practices.

The bank’s chief executive, Martin Blessing, said his firm took the violations “very seriously”.

He added that Commerzbank would make “changes to our systems, training and personnel to address the deficiencies identified by US and New York authorities”.
‘Broader problem’

In a statement announcing the penalty, Benjamin M. Lawsky, the superintendent of New York’s Department of Financial Services (DFS), highlighted that Commerzbank employees had “sought to alter the Bank’s transaction monitoring system so that it would create fewer ‘red flag’ alerts about potential misconduct”.

This, Mr Lawsky said, “highlights a potential broader problem in the banking industry”.
The DFS also ordered Commerzbank to fire four employees involved in the violations.

Another release related to the penalties, issued by the US Attorney for the southern district of New York and the FBI, details the steps taken by Commerzbank employees to avoid detection by their colleagues.

One back-office staff member emailed: “If for whatever reason CB [Commerzbank] New York inquires why our turnover has increase[d] so dramatically, under nocircumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!”

Commerzbank is the latest in a long list of banks to have been charged for falling foul of US sanctions.

In 2014, French bank BNP Paribas agreed to an $8.9bn (£5.99bn) penalty, while Standard Chartered has been charged twice in three years.

HSBC, ING and Credit Suisse are also among the offenders.

BBN/SSR/AD-13Mar15-11:43 am (BST)