Standard Chartered Settles for $340m on Iran Money Laundering Charges

Standard Chartered will pay a civil penalty of $340m to the New York State Department of Financial Services (DFS), in order to settle the regulator's charges that the UK-listed bank hid at least a quarter of a trillion US dollars' worth of transactions linked to US-sanctioned Iran.

In a statement from the DFS' supertintendent of financial services, Benjamin Lawsky, the regulator also confirmed that while the bank has reached a settlement, Standard Chartered will have to take a number of radical steps to monitor its New York subsidiary.

"The Bank shall install a monitor for a term of at least two years who will report directly to DFS and who will evaluate the money-laundering risk controls in the New York branch and implementation of appropriate corrective measures," said the DFS.

"In addition, DFS examiners shall be placed on site at the Bank. The Bank shall permanently install personnel within its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the Bank."

The move to settle with the New York state regulator has also meant that the scheduled 15 August hearing is now adjourned.

Despite the settlement with the DFS, Standard Chartered faces possible future charges with other U.S. authorities including the Treasury, the Federal Reserve, the Justice Department, and New York prosecutors, such as the Manhattan District Attorney that are all conducting a two-year probe.

"We will continue to work with our federal and state partners on this matter," said the DFS.

Standard Chartered's Hong Kong-listed share price has risen by nearly 7 percent on news of the settlement, to HK$176.70 as of 0645 GMT. Its London-listed share price rose by 4 percent in early trading to 1423.50p as of 0712 GMT.

On 6 August, the DFS said it conducted an extensive investigation, which included the review of more than 30,000 pages of documents, including internal Standard Chartered Bank (SCB) e-mails, that "describe wilful and egregious violations of law".

"For almost 10 years, SCB schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250bn, and reaping SCB hundreds of millions of dollars in fees," the DFS said.

"SCB's actions left the US 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."

Standard Chartered and its consultancy, Deloitte, have delivered a strong reaction to the charges.

Standard Chartered's CEO Peter Sands said "we reject the position and portrayal of facts by the Department of Financial Services (DFS). It would be "disproportionate and wholly inconsistent with the actions of other US authorities in other sanctions matters to revoke the bank's New York licence."

"There are lots of matters in that order that either we don't recognise or we don't understand or are factually inaccurate," added Sands. He added that the probe was "very damaging" for the brand.