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Standard Chartered to pay $327m settlement

Staff writer ▼ | December 10, 2012
Standard Chartered has agreed to a $327-million settlement with U.S. officials. The bank was investigated or possible violations of economic sanctions against Iran and other countries.
Standard Chartered
Standard CharteredStandard Chartered has agreed to a $327-million settlement with U.S. officials. The bank was investigated or possible violations of economic sanctions against Iran and other countries.


Standard Chartered has reached the settlements with the Office of Foreign Assets Control (OFAC), the Federal Reserve Bank of New York, the Department of Justice and the New York County District Attorney's Office regarding U.S. dollar payment practices primarily between 2001 and 2007. Under the terms of the agreement no further action will be taken against Standard Chartered by these authorities if it meets the conditions set out in the agreements and one of the conditions is payment of a cash amount of $327 million.

The payment is for past violations of sanctions laws and the lack of transparency in connection with certain former payment practices which were terminated in 2007. OFAC found that "while SCB's omission of information affected approximately 60,000 payments related to Iran totalling $250 billion, the vast majority of those transactions do not appear to have been violations of the Iranian Transactions Regulations".

Over the period from 2001 to the end of 2007, OFAC found that approximately $24 million of transactions processed on behalf of Iranian parties and a total of $109 million on behalf other sanctioned entities from other countries (Burma, Sudan and Libya) appeared to be in violation of sanctions laws. SCB New York processed $139 trillion in US dollar payments. The Bank ceased its Iranian USD payments business in late 2006 and in the following year stopped transacting any new business with Iranian entities, well before such actions were required by U.S. authorities.

In more than five years since the events that led to settlements, the Bank has completed a comprehensive review and upgrade of its compliance systems and procedures. Steps taken include strengthening sanctions and customer due-diligence screening systems, the addition of New York-based sanctions-compliance and financial-crime reporting staff, the hiring of an independent consultant, and the establishment of testing, audit and quality assurances policies and procedures.


 

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