A settlement charge of $1.1bn has been fixed for Standard Chartered in connection to charges against the bank of implementing insufficient money-laundering controls and violating sanctions against Iran and other countries imposed by the US and other global bodies. The settlement is to be made with US and UK authorities.
In connection to the charges of violation of sanctions against a string of countries including Iran, a settlement amount of $947m has been agreed by the British bank to be paid to American agencies, including the US Department of Justice.
The bank was also separately fined an amount of £102m for anti-money-laundering breaches by the Financial Conduct Authority. The charges included “shortcomings” in its counter-terrorism finance controls in the Middle East. This was the second largest fine ever imposed over anti money laundering failures of banks by the UK regulator.
The latest fines settled “apparent violations” of sanctions imposed against Burma, Zimbabwe, Cuba, Sudan, Syria, and Iran, said the US treasury department. Between 2009 and 2014, transactions worth $438m were processed by Standard Chartered, it said, and added that the majority of the transactions were made with accounts linked to Iran. The Dubai branch of the bank was used by the bank for routing of payments through, or to, its New York office or other US-based banks.
In February, the British bank had announced its plans of set aside $900m as precaution against the US and UK penalties, and therefore the fines and the settlement was nothing of a surprise for the markets. However the first quarter results of the bank would be hit by an additional $190m hit because of the final settlements amount which would be reported on 30 April.
Standard Chartered said on Tuesday that it “accepts full responsibility for the violations and control deficiencies”, adding that the “vast majority” of the alleged incidents took place before 2012. It also added that none of the incidents had taken place post 2014.
The bank in its statement however partially blamed two of its former employees who were “aware of certain customers’ Iranian connections and conspired with them to break the law, deceive the group and violate its policies”, the bank said.
“Such behaviour is wholly unacceptable to the group,” Standard Chartered said.
The bank is headquartered in London but is more focused on doing business and capturing market share in Asia, the Middle East and Africa.
“We are pleased to have resolved these matters and to put these historical issues behind us. The circumstances that led to today’s resolutions are completely unacceptable and not representative of the Standard Chartered I am proud to lead today,” said Bill Winters, the chief executive.
The latest settlement amounts that were announced on Tuesday combined is the highest fine amount for the bank since 2012 when it agreed to pay $667m for settlement of charges by US authorities of sanctions breaches between 2001 and 2007.