Deutsche Boerse Unit in $152 Million Iran Sanctions Accord

Deutsche Boerse AG unit Clearstream Banking SA will pay $152 million to resolve an investigation that it violated U.S. economic sanctions on Iran, the Treasury Department said.

The settlement stems from Clearstream’s use of an account at an undisclosed U.S. financial institution in New York to hold $2.8 billion in securities on behalf of the Central Bank of Iran, the Treasury said today in a statement.

“Clearstream provided the government of Iran with substantial and unauthorized access to the U.S. financial system,” Adam Szubin, director of Treasury’s Office of Foreign Assets Control, said in the statement.

After meeting with Treasury officials in late 2007 and early 2008, Luxembourg-based Clearstream transferred interests in the securities from the Iranian central bank’s account at Clearstream to a European bank’s newly-opened custody account at Clearstream, the Treasury said.

The new account allowed the central bank to continue holding its interests in the securities through Clearstream’s U.S. account, with its interest being “buried one layer deeper in the custodial chain,” the government said.

Nicolas Nonnenmacher, a spokesman for Clearstream, said the company has implemented a new compliance program and is pleased to have resolved the matter. Clearstream has the funds to cover the settlement payment, he said.

“This is a severe penalty and we have taken actions to address the matter going forward,” Nonnenmacher said in a statement. “We are seeing that compliance has become a top priority across the industry and we, too, are taking this matter very seriously, given the severe penalty.”

http://www.bloomberg.com/news/2014-01-23/clearstream-in-152-million-accord-for-iran-sanctions-violation.html