"We cannot let this stand, and today's settlement sends a strong message that we will not let it stand."

Lanny Breuer, the assistant attorney general who heads the Justice Department's criminal division, said: "I hope that other financial institutions are watching and learning from Credit Suisse's experience."

Bank investigated

The $536m will be split between the US government and the district attorney's office in Manhattan, which also participated in the settlement talks with the bank along with the federal reserve and the treasury department.

The Swiss bank has been under investigation for years over business it did with countries subject to US economic sanctions, including Libya, Myanmar, Sudan and Cuba, between 2002 and 2007.

Investigators said that Credit Suisse hid the identities of Iranian customers in transactions that went through the US.

Prosecutors said more than $1.6bn was moved through the US financial system through these transactions.

High standards

Court documents suggest the bank may have begun evading US sanctions as early as 1986, when sanctions on Libya were first imposed.

Credit Suisse said it had reviewed its US dollar payments that involved countries, people or entities subject to sanctions.

In a statement on Wednesday the bank said: "Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses and takes this matter extremely seriously".

Earlier this year, Lloyds TSB agreed to forfeit $350m for helping customers evade US sanctions on business transactions with Sudan, Iran and Libya.

The court papers filed on Wednesday say that when Lloyds decided in 2003 to stop doing such business, the Iranian banks moved their business over to Credit Suisse.