United States’ New York Regulator Orders Standard Chartered Bank to Explain Alleged ‘Grave’ Money Laundering Violations
The New York State Financial Services Department Aug. 6 ordered officials of a New York-licensed Standard Chartered plc subsidiary to appear before department superintendent Benjamin M. Lawsky Aug. 15 to explain “apparent grave violations of law and regulation” by allegedly entering into financial transactions with the Central Bank of Iran and other Iranian entities in violation of U.S. Office of Foreign Assets Control rules and state books and records laws.
The New York-licensed Standard Chartered Bank, described in the order as a “rogue institution” for nearly 10 years “schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping for SCB hundreds of millions of dollars in fees. SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity,” an Aug. 6 department order said.
While its initial focus is on SCB’s deals with Iran, the order said SCB conducted “similar” business with other U.S. sanctioned countries, including Libya, Myanmar, and Sudan. “Investigations of these additional matters is ongoing,” the order said.
In addition to revocation of its banking license the firm’s dollar clearing operations could be suspended, the order said.
A legal practitioner in the Iran sanctions field told BNA that this order could be the next in a long line of “stripping cases” in which the offending financial institutions stripped out from the identities of the parties to the transactions any reference linked to Iran.
A Standard Chartered spokeswoman did not immediately respond to a request for comment…