German engineering giant Siemens is to pay fines totalling over €1 billion to settle two long-running corruption court cases.

In the US, the company will pay €350 million to the Department of Justice in order to settle charges of bribery and false accounting, and €350 million to the Securities Exchange Commission.

In Munich, where the company’s headquarters are located, it has agreed to pay €395 million to settle a case accusing the board of failing to fulfil its supervisory obligations.

The company was accused of setting up a €1.3 billion bribe fund in order to win contracts, a charge to which Siemens’ lawyers have submitted a guilty plea.

The fines bring the total cost to Siemens of the corruption scandal to €2.5 billion. This week’s fines, although gargantuan, in fact represent something of a victory for the company’s current management. They had feared that the scandal could have cost it as much as $5 billion (€3.6 billion).

"The corruption cases in Germany and the US are now over,” said Siemens president Gerhard Cromme yesterday. “Today marks the end of an unprecedented two-year effort to resolve extremely serious matters."

Siemens is part-owner of computer manufacturer and IT services provider Fujitsu-Siemens, as well as an IT service provider in its own right. It also builds telecommunications systems for both carriers and corporate customers.