July 8 U.S. state and federal authorities have
begun settlement talks with Germany's Commerzbank AG
and Deutsche Bank over their dealings with countries
blacklisted by the United States, a source with direct knowledge
of the regulatory investigations said.
The settlement talks have just begun and the timing of the
deal is unclear at this time, the person told Reuters.
Deutsche Bank and Commerzbank declined to comment.
The New York Times first reported that the settlement talks
with Commerzbank were on and a deal could be struck as soon as
this summer. (nyti.ms/1xJyjeA)
Commerzbank, accused by U.S. authorities of transferring
money through its U.S. operations on behalf of companies in Iran
and Sudan, could pay at least $500 million in penalties, the New
York Times reported.
The No.2 German lender would likely face a so-called
deferred prosecution agreement that would suspend criminal
charges in exchange for the financial penalty and other
concessions, the report said.
A potential deal with Commerzbank, which is expected to pave
the way for a separate settlement with Deutsche Bank, would pale
in comparison to the deal with France's BNP Paribas SA
, the NYT said.
Last week, French bank BNP Paribas pleaded guilty to two
criminal charges and agreed to pay almost $9 billion to resolve
accusations it violated U.S. sanctions against Sudan, Cuba and
Iran, a severe punishment aimed at sending a clear message to
other financial institutions around the world.
Commerzbank had 934 million euros ($1.27 billion) at the end
of 2013 as provision for litigation risks, including a possible
U.S. probe into whether the bank breached sanctions.
Reuters reported last week that Deutsche Bank, Banamex USA,
the U.S. arm of Citigroup Inc's Mexican banking group
Banamex, and two major French banks - Credit Agricole
and Societe Generale, are among those being
investigated for possible money laundering or sanctions
However, talks with the two French banks were not on the
front burner, the source told Reuters on Monday.
Reuters could not immediately reach the authorities
conducting the investigations - U.S. Department of Justice, New
York State's banking regulator and the Manhattan district
Numerous other banks, including Standard Chartered,
Lloyds Banking Group and Credit Suisse Group
have previously settled with U.S. authorities over allegations
they violated sanctions.
($1 = 0.7345 Euros)
(Reporting by Supriya Kurane in Bangalore and Karen Freifeld in
New York; additional reporting by Thomas Atkins and Alexander
Huebner; Editing by Gopakumar Warrier)