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FCPA Blog Daily News

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Tuesday
Apr092019

Standard Chartered Bank pays $657 million to settle OFAC violations

Standard Chartered Bank agreed Tuesday to pay $657 million to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) to resolve sanctions violations primarily related to Iran, with other violations involving current or former sanctions on Cuba, Sudan, Burma, Syria, and Zimbabwe.

StanChart paid $639 million for the Iran sanction violations, together with violations involving Cuba, Sudan, Burma, and Syria. OFAC called that the "global settlement."

London-based StanChart settled the Zimbabwe sanction offenses separately, paying OFAC about $18 million.

In the global settlement, OFAC said from June 2009 until June 2014, StanChart processed 9,335 transactions totaling $437.5 million to or through the United States. All of the transactions involved persons or countries subject to comprehensive sanctions programs administered by OFAC, the Treasury Department said

The majority of the transactions were for Iran-related accounts maintained by StanChart's Dubai branches, including accounts in Dubai held for a number of general trading companies and a petrochemical company. 

StanChart Dubai processed U.S. currency transactions to or through the bank's branch office in New York and other U.S. financial institutions on behalf of customers physically located or based in Iran.

For violations covered by the global settlement, the bank didn't voluntarily self-disclose the "egregious case," OFAC said. 

According to OFAC, the bank agreed as part of the global settlement to resolve apparent violations of the now-repealed Burmese Sanctions Regulations, the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, the now-repealed Sudanese Sanctions Regulations, and the Syrian Sanctions Regulations.

Separately, StanChart agreed to settle violations of the Zimbabwe Sanctions Regulations for $18 million.

All of the Zimbabwe transactions involved individuals identified on OFAC's SDN list or parties that were owned 50 percent or more, directly or indirectly, by persons on the SDN List at the time the transactions occurred. StanChart processed 1,795 transactions totaling $76.8 million for the sanctioned entities.

StanChart voluntarily self-disclosed the Zimbabwe-related violations, OFAC said. 

The DOJ said today StanChart agreed to forfeit $240 million and pay a fine of $480 million for violating the International Emergency Economic Powers Act. OFAC said in the global settlement it will credit StanChart for the amount of the criminal penalties paid.

In the UK Tuesday, the Financial Conduct Authority fined StanChart £102 million ($133 million) for anti-money laundering breaches related to its branches in the UAE. Among other things, the FCA said StanChart opened an account with $653,000 in cash from a suitcase "with little evidence that the origin of the funds had been investigated."

In 2016, Singapore seized $177 million from StanChart and other banks for AML lapses related to 1MDB. 

The April 9, 2019 Standard Chartered Bank - OFAC settlement agreement can be viewed here

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Harry Cassin is the publisher and editor of the FCPA Blog.