Standard Chartered Settles Money Laundering Controls Failing for $300m

Standard Chartered has agreed to pay a $300m penalty to New York's top banking regulator, and will suspend or exit some important businesses for failing to improve its money laundering controls.

Standard Chartered's stock was trading 0.78% higher at 0841 BST in London.

Standard Chartered said in a statement it "accepts responsibility for and regrets the deficiencies" in its anti-money laundering surveillance system in New York, and is committed to fixing the problems with "utmost urgency".

The British bank said it "remains fully committed" to the Hong Kong and UAE markets, and that the vast majority of its clients and businesses, as well as its US licenses, remain unaffected.

The civil settlement, announced on 19 August by Benjamin Lawsky, the Superintendent of the New York Department of State Financial Services (DFS), comes as the bank failed to remedy problems identified in 2012.

The DFS said in a statement: "Under the order, SCB will suspend dollar clearing through its New York Branch for high-risk retail business clients at its SCB Hong Kong subsidiary; exit high-risk client relationships within certain business lines at its branches in the United Arab Emirates; not accept new dollar-clearing clients or accounts across its operations without prior approval from DFS; pay a $300m [£181m, €225] penalty; as well as take other remedial steps."

Lawsky said in the DFS statement: "If a bank fails to live up to its commitments, there should be consequences. That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses."

The penalty will be the second handed out to the bank by DFS in two years.

In August 2012, Standard Chartered agreed to pay $340m to settle allegations that the bank had improperly processed transactions for Iranian customers, violating US sanctions compliance laws.