On 4 November 2015, Deutsche Bank reached a US$258 million settlement with the New York State Department of Financial Services (NYDFS) and the US Federal Reserve Bank regarding transactions with countries and entities subject to U.S. sanctions, including Iran, Libya, Syria, Burma, and Sudan.
Deutsche Bank employees violated anti-money laundering and counter terrorist financing rules when providing their services to customers located in these countries, and provided them with ways to avoid these transactions being scrutinised by the US government. The employees used several methods to achieve that, including removing details about sanctioned businesses in messages that banks sent to each other. This method allowed these messages to be undetectable by the US banking procedures for catching transactions from sanctioned businesses.
The US regulatory authorities found that Deutsche Bank, from 1999 to 2006, in relation to Iranian, Libyan, Syrian, Burmese, and Sudanese financial institutions and other entities subject to US economic sanctions used “non-transparent methods and practices” to shield them from scrutiny. The New York Department of Financial Services states in its final notice that Deutsche Bank used methods such as removing from SWIFT payment messages information that identified underlying parties to the transaction as entities subject to U.S. sanctions or including notes or code words in payment messages to hide any sanctions relationship before sending the payments to the US.
Deutsche Bank agreed to pay US$200 million to the NYDFS and US$58 million to the Federal Reserve. As part of the settlement, the bank also has agreed to install an independent monitor. Additionally, while several of the employees who were centrally involved in this misconduct no longer work at the bank, Deutsche Bank agreed to terminate an additional six employees involved in the scheme and ban three other employees from any duties involving the firm’s US operations.