Financial services giant Standard Chartered Bank agreed Tuesday to pay U.S. and British authorities more than $1 billion to resolve allegations that it processed transactions for customers in Iran and other countries under U.S. sanctions.
The London-based bank, which previously drew scrutiny for allegedly scheming with the Iranian government to launder $250 billion, said it accepts full responsibility for the new batch of violations and for the internal lapses that allowed the illegal transactions to go unchecked.
Standard Chartered processed 9,335 transactions from June 2009 until May 2014 totaling $437.6 million that involved persons or countries subject to U.S. sanctions, the Treasury Department said. In addition to Iran, the countries included Myanmar, formerly known as Burma, and Cuba.
Two employees in the bank’s Dubai office are accused of processing the bulk of the transactions for an Iranian businessman who allegedly set up companies registered in the United Arab Emirates as fronts for a money exchange business in Iran.
Standard Chartered said it has since overhauled its compliance operation, adding mandatory training for all employees on sanctions and rooting out money laundering and corruption. It is also establishing a financial cybercrime intelligence unit in the U.S.
“We are pleased to have resolved these matters and to put these historical issues behind us,” the bank’s group chief executive, Bill Winters, said in a statement. “The circumstances that led to today’s resolutions are completely unacceptable and not representative of the Standard Chartered I am proud to lead today.”
Under the agreement announced Tuesday, Standard Chartered will pay $947 million in penalties to U.S. authorities and 102 million pounds ($133 million) to the U.K. Financial Conduct Authority. Of that, about $427 million will go to agencies in New York state.
“Today’s resolution sends a clear message to financial institutions and their employees,” Assistant U.S. Attorney General Brian Benczkowski said in a statement. “If you circumvent U.S. sanctions against rogue states like Iran — or assist those who do — you will pay a steep price.”
One of the Dubai employees has pleaded guilty to charges of conspiracy and falsifying business records. An indictment charging the Iranian businessman with conspiracy was unsealed Tuesday in Washington.
Standard Chartered itself was charged with conspiring to violate sanctions, but won’t be tried. As part of the settlement, it extended a deferred prosecution agreement with the U.S. Justice Department and the Manhattan District Attorney’s office in New York City until April 2021.
Doing business with countries under U.S. economic sanctions has cost Standard Chartered big bucks in the past.
New York regulators reached a $340 million settlement with the bank in 2012 to settle allegations it schemed to launder $250 billion for Iranian entities from 2001 to 2007.
A few months later, Standard Chartered agreed to pay $327 million to settle federal and New York charges it laundered money on behalf of entities in four countries — Iran, Sudan, Libya and Myanmar — that were subject to U.S. sanctions from 2001 through 2007.
In 2014, Standard Chartered agreed to pay a $300 million penalty and suspend dollar exchanges through its New York branch after the bank was accused of failing to flag potentially high-risk transactions for further review, including many originating from branches in the United Arab Emirates.
Sisak reported from New York.