Deutsche Bank Latest To Face US Probe On Iranian Links
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U.S. financial regulators are in the midst of investigating German financial giant Deutsche Bank, along with several other European banks, for their alleged ties with sanctioned nations such as Iran and Sudan, reported the New York Times on Saturday, with both federal and state prosecutors said to be involved in the case.
U.S. financial regulators are in the midst of investigating German financial giant Deutsche Bank, along with several other European banks, for their alleged ties with sanctioned nations such as Iran and Sudan, reported the New York Times on Saturday, with both federal and state prosecutors said to be involved in the case.
According to NYT sources, the probe is believed to be in its initial phases, though Deutsche Bank is alleged to have only moved money on behalf of Iranian clients through its American operations pre-2008.
[quote]A spokesman for the German bank told Reuters that his company decided “not (to) engage in new business with counterparties in countries such as Iran, Syria, Sudan and North Korea and to exit existing business to the extent legally possible,” in 2007. The spokesman however declined to comment on whether any such activity had happened prior to the company’s 2007 decision.[/quote]Last Tuesday, British bank Standard Chartered (SCB) agreed to pay U.S. regulators $340 million to settle a probe into their financial activities with Iran. SCB had been earlier accused of hiding $250 billion in illicit transactions with the rogue state.
Related: Standard Chartered Accused Of Hiding $250 Billion In Iranian Transactions
Related: Standard Chartered Fined $340 million in Money Laundering Probe
Related: Why ‘Rogue’ UK Bankers Can’t Escape US Regulators
Much of the money laundering cases in both cases also seemed to centre around a loophole in U.S. regulation pre-2008, which allowed financial institutions to easily transfer money on behalf of Iranian banks and corporations.
The loophole was eventually closed prior to the financial crisis, though U.S. regulators are now aggressively targeting banks who they believe have flouted sanctions imposed on several states.
Thus far, five foreign banks – ABN Amro, Barclays, Credit Suisse, Lloyds and ING – have had to pay off nearly $1.8 billion in fines to the U.S. Treasury Department, the Justice Department, and to several other state-based agencies.
The separate investigations being held by both federal and state authorities however have led some analysts to wonder whether a clash may occur between the two sides, or whether a probe by one side may complicate matters for the other party.
In the SCB investigation for instance, New York state regulator, Benjamin M. Lawsky, is believed to have acted alone in bringing the charges towards the British bank. Furthermore, in the past, the New York banking department had worked alongside federal and state prosecutors, but did not get a share of any of the forfeited money.
When asked on whether Lawsky would participate in the latest investigations, a spokesman only said that the New York-based regulator “will continue to cooperate and work with our law enforcement partners both federal and state.”
