Banking group warned of multimillion-pound fine for ‘sanctions breaches’
Standard Chartered faces a fine of more than £10m by the Office of Financial Sanctions Implementation (OFSI) for allegedly failing to prevent sanctions breaches.
Sky News is reporting that the London-based bank, with a big presence in the Far East and Asian markets, has been told by the Treasury organisation that it intends to impose the penalty in the coming weeks.
It is understood that Standard Chartered, the main shirt sponsor of Liverpool FC, could appeal the fine.
A fine of £10m would have little impact on the bank, but more sanctions against the bank would be seen as further reputational damage following a series of actions taken against the organisation in recent years over alleged sanctions breaches.
Standard Chartered has already been hit this year by penalties totalling more than £800m from regulators in London and New York for violating sanctions against Iran.
OFSI was set up in 2016, and provides a quarterly report to Parliament on the operation of the UK’s regime for freezing the assets of suspected terrorists.
Its latest annual review is likely to be published in the Autumn.
In April, the Financial Conduct Authority imposed a £102m fine on Standard Chartered for breaches in its UK wholesale bank correspondent banking business and its branches in the United Arab Emirates.
According to Sky, the City watchdog said the bank had opened an account with the equivalent of more than £500,000 in a suitcase in the Middle East “with little evidence that the origin of the funds had been investigated”.
It also said that Standard Chartered had neglected to gather information about a customer exporting a commercial product with potential military applications.
The FCA described the bank’s oversight of its financial crime controls as “narrow, slow and reactive”.
The series of breaches identified by the City watchdog were found to have occurred up until the end of 2014.
Sky also reports that, in the US, the Department of Justice (DoJ) imposed a fine of $480m and said Standard Chartered had agreed to forfeit a further $240m that had been processed in 9,500 transactions “through US financial institutions for the benefit of Iranian entities”.
The penalty was viewed as being especially damaging to the bank’s reputation because of the Trump administration’s increasingly hostile rhetoric towards Iran.
At the same time, the New York County District Attorney’s Office imposed a further fine of more than $292m and extended Standard Chartered’s deferred prosecution agreement with it by an additional two years.
Sky said Standard Chartered and the Treasury declined to comment.