Standard Chartered Bank (SCB) has reached a settlement agreement with the US Department of Treasury’s Office of Foreign Assets Control (OFAC) regarding violations of the Cuban Assets Control Regulations, now-repealed Burmese Sanctions Regulations, Iranian Transactions and Sanctions Regulations, now-repealed Sudanese Sanctions Regulations, and the Syrian Sanctions Regulations between 2009 and 2014. The financial institution, which is headquartered the United Kingdom, processed over 9,000 transactions worth over $400 million through the United States which involved persons or countries subject to OFAC sanctions. The vast majority of the transactions involved Iran-related accounts that were maintained by the bank’s Dubai, UAE branch (SCB Dubai).
From June 2009 to June 2014 SCB Dubai held accounts for several general trading companies and a petrochemical company that were located in Iran. SCB Dubai processed USD transactions through SCB’s New York office (or other US branches) on behalf of customers that were either physically located in Iran or a resident of Iran that sent payment instructions to SCB Dubai.
SBC did not voluntarily self-disclose the violations and OFAC found the violations to be egregious.
On a side note: SCB has also settled (separate settlement from the one above) with OFAC related to some apparent violations of the Zimbabwe Sanctions Regulations violations. The bank will remit $18 million to settle the violations related to 1,795 transactions worth $76 million that involved persons located on OFAC’s List of Specially Designated Nationals and Blocked Persons. SBC maintained account relationships with blocked individuals and engaged in fund transfers and debit/credit card transactions that were processed by SCB New York (and other US institutions). SBC did voluntarily disclose these violations and OFAC found them to be non-egregious.
SCB has also entered into separate settlement agreements with the Board of Governors of the Federal Reserve System, the New York State Department of Financial Services (DFS), and the United Kingdom’s Financial Conduct authority (FCA) under which the financial institution will pay additional penalties of more than $477 million. After all agreements are settled, SCB will pay over $1 Billion in fines and penalties in connection with violating the Iranian Transactions and Sanctions Regulations.
Full OFAC Settlement Agreement: http://www.treasury.gov/resource-center/sanctions/CivPen/Documents/scb_settlement.pdf
Department of Justice Notice: http://www.justice.gov/opa/pr/standard-chartered-bank-admits-illegally-processing-transactions-violation-iranian-sanctions